Geographical Determinants of Regional Retail Sales: Evidence from 12,500 Retail Shops in Qiannan County, China

Abstract

The rapid development of the Chinese economy has stimulated consumer demand and brought huge opportunities for the retail industry. Previous studies have emphasized the importance of estimating regional consumption potentiality. However, the determinants of retail sales are yet to be systematically studied, especially at the micro level. As a result, the realization of sustainable development goals in the retail industry is restricted. In this paper, we studied the determinants of retail sales from two aspects—location-based socioeconomic factors and spatial competition between shops. Using 12,500 retail shops as our sample and by adopting a grid-division strategy, we found that regional retail sales can be positively impacted by nearby population, road length, and most non-commercial points of interest (POIs). By contrast, the number of other commercial facilities, such as catering facilities and shopping malls, and the area of geographic barriers often caused negative impacts on retail sales. As to the competition effects, we found that the isolation and decentralization of shops in one area have a marginally positive effect on sales performance within a threshold distance of 226.19 m for a central grid and a threshold distance of 514.85 m for surrounding grids, respectively. This study explores the determinants of micro-level retail sales and provides decision makers with practical and realistic approaches for generating better site selection and marketing strategies, thus realizing the sustainable development goals of the retail industry.