The structural changes in retailing towards out-of-town establishments over the last few decades have affected the attractiveness of towns and cities and also the urban transport system has been profoundly affected. Many countries in Europe have implemented policies and planning guidelines that reflect a more restrictive attitude towards out-of-town establishments. This has been done, however, with an in-depth economic analysis. This paper discusses the research agenda in this field with examples and applications from the grocery sector. The main focus is taken from two complementary perspectives: the construction of a spatial general optimization mode and identification of potential social dilemmas associated with structural changes. The results show that out-of-town stores are not efficient when the available streets and roads are congested, even when economies of scale are considered. The hypothesis that social dilemmas influence household choice of stores is supported by the results. Together with the problems of varying preference structures between individuals in the same residential areas, show that town planning and other institutional measures should be employed to prevent an excessive dominance of out-of-town stores in grocery retailing and support more variety in local retail service.
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