Does Planning Regulation Protect Independent Retailers?

Raffaella  Sadun

Article | Review of Economics and Statistics | December 2015

Does Planning Regulation Protect Independent Retailers?

Abstract

Regulations aimed at curbing the entry of large retail stores have been introduced in many countries to protect independent retailers. Analyzing a planning reform launched in the United Kingdom in the 1990s, I show that independent retailers were actually harmed by the creation of entry barriers against large stores. Instead of simply reducing the number of new large stores entering a market, the entry barriers created the incentive for large retail chains to invest in smaller and more centrally located formats, which competed more directly with independents and accelerated their decline. Overall, these findings suggest that restricting the entry of large stores does not necessarily lead to a world with fewer stores, but one with different stores, with uncertain competitive effects on independent retailers.

Keywords: Small Business; Competition; Retail Industry; United Kingdom;

Format: Print

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Citation:

Sadun, Raffaella. "Does Planning Regulation Protect Independent Retailers?" Review of Economics and Statistics 97, no. 5 (December 2015): 983–1001.

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Does Planning Regulation Protect Independent Retailers?

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