Anchor stores

Planned shopping malls usually have one or more department (anchor) stores and multiple specialized retailers selling substitutable commodities in each commodity category. If consumers know their taste for the anchor's commodity and its price, but learn about a retailer's commodity only by...

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Bibliographic Details
Published in:Journal of urban economics 2003-05, Vol.53 (3), p.413-435
Main Authors: Konishi, Hideo, Sandfort, Michael T.
Format: Article
Language:English
Subjects:
Consumers
Economics
Shopping
Urban economics
Urban studies
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Summary:Planned shopping malls usually have one or more department (anchor) stores and multiple specialized retailers selling substitutable commodities in each commodity category. If consumers know their taste for the anchor's commodity and its price, but learn about a retailer's commodity only by costly search, collocation may benefit both store types. Intra-mall competition reduces markups, but anchors guarantee a minimum surplus from search. A mall with many retailers makes finding a suitable specialized commodity highly probable. For some parameters, additional consumer search dominates the loss in retail markups, so a profit-maximizing land developer would rent mall space to both store types.
ISSN:0094-1190
1095-9068
DOI:10.1016/S0094-1190(03)00002-0