The Influence of Big Stores Expansion into Small Cities on Retail Trade

Abstract

With their remarkable growth in Japan, big stores started to expand into small local cities in 1970's, a trend that continves. The influence of big stores on the central shopping districts in small local cities is huge, and it also involves social problems. Two aspects can be noticed in the effects of their expansion into small cities. One is the influence on the retail function of the cities, and the other is on the central shopping districts. These two do not always coincide. Many studies have been published mainly on the change of the retail function of cities from the view point of central place theory. However, the influence of big stores in the small cities upon the central shopping districts has only partially been considered.The purpose of this paper is to examine the influence both on the retail function of cities and on their central shopping districts. The author divided the small cities in Japan with less than 100, 000 population into five groups according to the presence of a big store with the selling pace of more than 3, 000m2, and also to the time a big store appeared for the first time in the city. Two out of these five groups are focused on in this paper:One is the group of cities where big stores were built from July, 1976∼June, 1979, and the other where big stores were built from July, 1979∼June, 1982. These two groups are analysed respectively, and their differences are considered. The results are summarized as follows:1. The retailing function of cities can be considered from two points of view, sphere of traing and market share. Putting these two viewpoints together, the author makes hypotheses about the increase rate of the retail sales in a city. As a result of multiple regression analysis of the increase rate of the retail sales in cities, we can see that the increase rate of the retail sales in a city is most closely related to the increase rate of population. Moreover, from July, 1976∼June, 1979, the appearance of big stores contributed to the increase of the retail sales in cities, but from July, 1979∼June, 1982, little contribution can be seen. From 1979 to 1982 it can also be recognized that the commercial centrality of cities has a negative correlation with the increase rate of retail sales. Taking these facts into consideration, from 1979 to 1982 it can be inferred that there was a division and decrease of the trade area these of small cities.2. In analyzing the influence of the appearance of big stores upon the shopping districts, the author substituted clothing shops' retail sales data for the retail sales data of central shopping districts, since the latter were not available. As a result of this analysis, we can see that from July, 1976∼June, 1979, the opening of big stores had a stimulus effect on central shopping districts, but not from July, 1979∼June, 1982. This change can be explained as follows: Major clothing shops became tenants of big stores, which weakened sales for central shopping districts, especially in 1979-1982. As a result, the sales of clothing stores lost its value as an index for estimating the sales of central shopping districts.3. The effect of the opening of big stores on the central shopping districts differ from city to city, depending on the location of big stores. Generally speaking, stimulus effects to shopping districts can be seen when a big store is located inside the shopping district, but not when it is located in the suburbs of the city. In the case of small cities, however, big stores usually have bad effects on the shopping districts even if they are located inside those districts, which was the case especially in 1979-1982. In addition, this paper clarified the main factors of the influence of big stores on shopping districts, such as the character of the city's trade area, cooperation between big stores and local shopping districts, leadership of the local chambers of commerce and industry, etc.