The Declining Rate of Return on Capital in US Retailing

Retailing is the marketing institution with which consumers have the most immediate and frequent contact. As such, consumers should be concerned with how the behaviour and performance of retailers will impact on them. While the consumer may not be explicitly aware of it, the rate of return (RoR) on...

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Bibliographic Details
Published in:International journal of physical distribution and materials management 1981-01, Vol.11 (1), p.25-39
Main Authors: Ingene, Charles A., Lusch, Robert F.
Format: Article
Language:English
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Summary:Retailing is the marketing institution with which consumers have the most immediate and frequent contact. As such, consumers should be concerned with how the behaviour and performance of retailers will impact on them. While the consumer may not be explicitly aware of it, the rate of return (RoR) on capital invested in retailing has both instantaneous and temporal impacts on consumer well-being. When the RoR is high, relative to the cost of capital, retail prices are probably higher than they need be. However, this high RoR may persuade other investors (i.e. potential retailers) to enter the market, thereby eventually lowering prices and increasing product availability.
ISSN:0269-8218
DOI:10.1108/eb014484