The diminishing market for local food stores: A case for collective action?

Abstract

A number of European countries have launched policy and planning guidelines with a more restrictive stance toward out-of-town establishments in grocery retailing. Two possible justifications for these decisions are the risk that social dilemmas influence the household's choice of which stores to use, and that many consumers would favor a different situation. In order to find if there are any efficiency problems in this field of inquiry, a study was conducted that combined a cost evaluation with a demand analysis for different store categories in grocery retailing. Results of the study, discussed in this paper, imply that the actual situation in grocery retailing in the districts studied accommodates the preferences of a minority who prefers to make the most of their grocery shopping in out-of-town establishments, while the large demand for high-quality local stores can not be realized due to social conditions and spatially dispersed preference structures among residents. The large stores have the effect of diminishing the market for smaller local stores in residential areas. Planners should take a more active role to prevent the dominance of out-of-town grocery retailers.