Inter-format spatial competition of Spanish hypermarkets

Abstract

This paper reports on research aimed at exploring and understanding the inter-format spatial competition of the Spanish hypermarket. First, the methodological approach is introduced through the theoretical and empirical development of a market response model. Spatial coverage reached by competing store formats is explicitly contemplated as the explanatory factor from the offer side. Analogously, the geodemographic profile is taken as the explanatory factor from the demand side. The proposed model is then applied to the intra-urban Spanish market defined by the Metropolitan Area of Madrid. The results confirm the analytical capabilities of the modelling approach and the relevance of both explanatory components. Moreover, they lead to interesting conclusions about the competitive structure and interaction, the impact of expansion and growth strategies, and the role of spatial heterogeneity in market response at the inter-format level.