Proximity-store introductions: A new route to big-box retailer success?

Abstract

To accommodate consumers’ increasing demand for access convenience and immediacy, big-box grocery retailers have started to rethink their store formats – adding small-box proximity stores to complement their traditional large-size super- and hypermarkets. Building on a unique data set covering all proximity-store openings in 60+ geographic markets in France by Carrefour, one of the world's largest big-box grocery retailers, the authors adopt an Empirics-First approach to investigate whether, and in what settings, opening proximity stores cannibalizes, or rather acts synergistically with, the retail chain's existing on- and off-line operations. In most markets, small box stores affect the parent store's market position. However, there is considerable heterogeneity in terms of both the channel that is affected (off- or online) and the direction of that impact (positive or negative). The authors identify several contingency factors that help explain this heterogeneity. Interestingly, some location factors that are commonly believed to nurture proximity store appeal turn out to be detrimental to the chain's overall on- and/or offline performance. Even though the authors reveal several novel insights and identify various contingency factors, numerous questions remain unanswered. To that extent, the authors conclude with a research agenda that may help shed insight in how to maintain and strengthen brick-and-mortar store relevance to convenience-seeking customers.