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- Title
One size fits all? The value of standardized retail chains.
- Authors
Klopack, Ben
- Abstract
Multi‐outlet firms, or chains, account for most US retail spending. This article quantifies the welfare and profit effects of standardized chains in the restaurant industry: chains face higher demand than independents, but are less flexible in customizing product selection or prices across locations. I find that on average chains could earn 19% higher variable profits if they could customize their product optimally, but they would lose 28% of their variable profits if they were to lose their demand advantages. Local policies that ban chains would decrease consumer welfare by 1.5% to 5.4% of restaurant spending and disproportionately impact lower income consumers.
- Subjects
RESTAURANTS; CHAIN restaurants; PRICES; CONSUMERS; SUPPLY &; demand; CHAIN stores
- Publication
RAND Journal of Economics (Wiley-Blackwell), 2024, Vol 55, Issue 1, p55
- ISSN
0741-6261
- Publication type
Article
- DOI
10.1111/1756-2171.12458