Retail Restructuring Research Articles

Retail Electricity Market Restructuring and Retail Rates

Prior to the 1990s, all U.S. states used a “cost of service (COS)” regulation regime in which investor-owned utilities were allowed to recover prudently incurred costs plus a rate of return on capital expenditures, and retail customers were unable to choose their electricity supplier. From 1996–2000, multiple states passed retail electricity market “restructuring.” This empirical research examines the effect of retail restructuring on electricity prices to final consumers. We find that rates increased in restructured states relative to plausible counterfactuals in the years post-restructuring. But by twelve years after retail restructuring, we no longer observe any difference. We investigate plausible mechanisms, finding evidence that retail prices became more responsive to natural gas prices due to retail restructuring, the timing of which coincided with increases in natural gas prices nationally. We also test for whether restructuring had distributional effects across customer classes and find that in the short run residential customers benefited relative to industrial customers during transition periods, but that this difference does not persist into full implementation.

The impact of the COVID-19 pandemic on cross-border shopping tourism: the case of Hungary

By today the smooth functioning of the global economy has been highly dependent on the uninterrupted flow of factors across borders. The free flow of tourists is also inevitable for the proper functioning of the global tourism industry. However, tourism and various forms of cross-border (tourism) activities were put under unprecedented pressure due to the COVID-19 pandemic, since most countries, including Hungary, introduced serious restrictions on mobility to slow down the spread of the virus. This paper focuses on a relatively under-researched topic, cross-border shopping tourism in the context of the COVID-19 pandemic. Before the outbreak of the pandemic, shopping tourism was deemed to be an increasingly important component of the tourism value chain. Several studies have demonstrated that shopping has become one of the most favourable activities among tourists and one of the major categories of tourists’ expenditure. Based on the review of the relevant literature, the paper introduces the notion and forms of shopping tourism and discusses the major research topics with special regard to the effects of the pandemic and other types of crisis events. The impact of the pandemic on shopping tourism is observed through the example of Hungary, whereby the effects of restrictions, exchange rate fluctuations, and price-level differences on the number of in- and outbound shopping trips, and the related expenditures, are evaluated. Results show that re-bordering processes due to the pandemic have not only resulted in an unprecedented decline in cross-border shopping tourism, but they also contributed to the spatial restructuring of shopping (tourism) and retailing. The pandemic not only sustained cross-border differentials vital to shopping tourism but sometimes even created new forms of them; these differences, however, could not counter the negative effects of restricted international mobility. The paper aims to contribute to the literature on cross-border tourism by reviewing the effects and consequences of COVID-19 and related restrictions on shopping tourism.

A recipe for an omnichannel warehouse storage system: Improving the storage efficiency by integrating block stacking and racking

Warehouses in multi-channel retailing are expected to possess storage capacity based on the purpose of operations. However, the inefficient use of storage capacity due to omnichannel retail restructuring, wherein mixed-storage items feature both online and offline, has prompted us to revisit the nature of existing storage systems (block stacking and racking). Most warehouses continue to improvise and undertake critical decision-making with regard to profiling balanced storage systems between block stacking and racking, including the efficient slotting of unit-load items across storage systems. This study aimed to establish a framework to systemically improve storage efficiency by achieving an optimum balance between block stacking and racking under inventory uncertainty – lot size and item dimensions. This study ingeniously proposes a two-stage stochastic programming model for robust optimisation during long-run profiling (redesign) and the multi-dimensional knapsack problem for achieving minimum space wastage during slotting (reshuffle). The study adopted a two-fold approach. First, the hypothetical directions for a balanced system, combining increases in buildings’ ceiling heights with its tendency to store low-volume, high-mix items, were examined. Second, the applicability of the two methods – redesign and reshuffle – was examined by considering a real-life case study and the life cycle of warehouse storage design. It was found that the reshuffling approach can resourcefully serve as a short-term solution for warehouses with imminent space issues. Redesigning also demonstrated a long-term space gain in floor space, thus minimising space wastage.

Do markets make good commissioners?: A quasi-experimental analysis of retail electric restructuring in Ohio

AbstractEmpirical support for the purported benefits of retail electric deregulation is mixed at best. Prior studies that identify states as simply “retail deregulated” overlook complex policy environments in which deregulation is implemented by regulators with a high degree of discretion. Prior studies also rely on Energy Information Administration data that do not account for core regulatory interventions that can take place during the process of implementing deregulation. Using robust time series household final bill survey data from the Public Utilities Commission of Ohio, this article provides a quasi-experimental analysis of the price impacts of retail electric restructuring in Ohio. The results suggest that residential electricity prices have increased following retail restructuring in all service territories in Ohio, with significant favourable welfare effects observed only in the Cincinnati area, where key policy implementation stages were not circumvented.

Commissioner Selection and Deregulation of US Gas Utilities

Le présent article se propose d’évaluer le rôle des motifs de réélection des commissaires de la fonction publique d’État dans la déréglementation du marché américain de la distribution de gaz au cours des vingt dernières années. Ces motifs de réélection peuvent affecter le choix des commissaires quant à la date et au type de régime règlementaire – restructuration de la vente au détail, plafonnement des prix ou réglementation progressive – à adopter pour déréglementer certains services publics. Le système de sélection des commissaires, le calendrier des élections et la composition des commissions sont évalués comme des facteurs politiques. Il ressort que la fréquence des élections est positivement liée au risque de déréglementation, bien qu’avec des délais différents. Dans les périodes d’élections, le risque de plafonnement des prix augmente immédiatement, tandis que celui des restructurations augmente dans les années qui suivent. Les élections favorisent un plafonnement des prix, tandis que les nominations par l’État favorisent la restructuration. Les commissions à tendance démocrates favorisent le plafonnement des prix au détriment de la restructuration.

Do Markets Make Good Commissioners?: A Quasi-Experimental Analysis of Retail Electric Restructuring in Ohio

Empirical support for the purported benefits of retail electric deregulation is mixed at best. Prior studies that identify states as simply “retail deregulated” overlook complex policy environments in which deregulation is implemented by regulators with a high degree of discretion. Prior studies also rely on Energy Information Administration (EIA) data that does not account for core regulatory interventions that can take place during the process of implementing deregulation. Using robust time series household final bill survey data from the Public Utilities Commission of Ohio (PUCO), this paper provides a quasi-experimental analysis of the price impacts of retail electric restructuring in Ohio. The results suggest that residential electricity prices have increased following retail restructuring in all service territories in Ohio, with significant favorable welfare effects observed only in the Cincinnati area, where key policy implementation stages were not circumvented.

Commissioner Selection and Deregulation of Gas Utilities

This study evaluates the role of reelection motives of state public service commissioners in the recent trend of deregulation in the gas distribution market. Competing-risk hazard models are used to explain when and which regulatory regime – retail restructuring, price cap or sliding-scale regulation – state commissions adopt to deregulate particular utilities. The system of selection of state commissioners, frequency and timing of elections, and composition of commissions and state legislatures are evaluated as determinants of commissioners’ personal motives. Frequency of elections is associated positively with the risk of all forms of deregulation, albeit with different time delay. In election years, the risk of price cap adoption rises immediately, while that of restructuring rises in subsequent years. Public elections favor price caps, while appointments by state legislature favor restructuring. Democratic-leaning commissions and legislatures appear to avoid restructuring in favor of price caps, perhaps due to their doubt over the prospect of effective competition.

The Political Economy of Deregulation in the U.S. Gas Distribution Market

Causes and consequences of deregulation and restructuring in utility markets in US states continue to draw heated debate. It is unclear why different utilities choose retail restructuring, price caps or sliding-scale plans. Various economic and political reasons lend themselves to explaining regulatory decisions. This study uses a stylized capture model to formulate predictions about regulators’ net benefits from a particular form of deregulation. Empirical hazard model evaluates the revealed choice at each regulator-utility pair. Among state-level political factors, frequency and timing of commissioner re-elections, system of selection of commissioners, and party composition of the commissions and state legislatures are significant in explaining the pattern of deregulation. Utilities’ prices, capacity and scope of operations help explain the timing of deregulation. Market concentration contributes. A negative significant association between the prevalence of restructuring (and sliding-scale plans), and of price caps across utility industries is identified.

Rethinking Commercial Revitalization: A Neighborhood Small Business Perspective

Inner-city neighborhood retail development often engenders vigorous popular and political debate about the scale, scope, and location of projects as well as their intended and inadvertent effects for urban landscapes, residents, and consumers. The term commercial revitalization is frequently used to characterize the resurgence of retail activity in neighborhoods previously considered moribund and perilous areas to avoid. In most instances, however, the factors animating commercial revitalization are implicitly assumed and, as such, are conceptually and empirically underdeveloped. This article elucidates commercial revitalization and focuses on the agency of neighborhood small business owners as underexplored stakeholders. Using the extended case methodology, this article examines Black business owners in Fort Greene, Brooklyn, who mounted a relatively successful campaign of retail restructuring by cultivating political clout, establishing civic alliances, participating in neighborhood planning, and promoting the commercial district as an economic and cultural enclave. However, merchants failed to develop mechanisms to sustain their vision and advance commercial revitalization. The article concludes with a discussion of planning and policy implications.

Restructuring retailing in Korea: the case of Samsung-Tesco

This study deals with the restructuring of retailing in Korea during the last decade. The retail sector was a closed market, lagging the advances in the manufacturing sector, until the later 1990s. The retail market in Korea has become rapidly internationalized particularly due to the entry of European multinational retailers. More specifically, we investigate the market entry and growth strategies of Tesco. International firms have differed in their approaches and the joint-venture strategy of Tesco and especially its explicit attention to organizational culture is examined. While other international firms have now quit the country, the joint-venture firm has become the second biggest in a rapidly growing sector. Retail firms developing in the future in Korea or elsewhere in the region may need to consider similar strategies.

Retail Change in Southern Sydney: Lifestyle-Linked Restructuring?

Examination of the changing composition of shopping centres in suburban Sydney between 1969 and 1998 suggests that retail restructuring is linked to lifestyle changes. The growth in the number of shops appears to have matched population growth in the 1990s, suggesting that the suburbanisation of retailing has stabilised. At the same time there has been increasing diversification in terms of the retail functions which are available and in terms of the places where these are available. These changes appear linked to a blurring of the distinction between shopping and leisure and to the use of shopping as a way of signifying identity.

Retail Restructuring and Consumer Choice 1. Long-Term Local Changes in Consumer Behaviour: Portsmouth, 1980–2002

Over the last two decades fundamental changes have taken place in the global supply and local structure of provision of British food retailing. Consumer lifestyles have also changed markedly. Despite some important studies of local interactions between new retail developments and consumers, we argue in this paper that there is a critical need to gauge the cumulative effects of these changes on consumer behaviour over longer periods. In this, the first of two papers, we present the main findings of a study of the effects of long-term retail change on consumers at the local level. We provide in this paper an overview of the changing geography of retail provision and patterns of consumption at the local level. We contextualise the Portsmouth study area as a locality that typifies national changes in retail provision and consumer lifestyles; outline the main findings of two large-scale surveys of food shopping behaviour carried out in 1980 and 2002; and reveal the impacts of retail restructuring on consumer behaviour. We focus in particular on choice between stores at the local level and end by problematising our understanding of how consumers experience choice, emphasising the need for qualitative research. This issue is then dealt with in our complementary second paper, which explores choice within stores and how this relates to the broader spatial context.

Retail Restructuring and Consumer Choice 2. Understanding Consumer Choice at the Household Level

This paper complements the preceding one by Clarke et al, which looked at the long-term impact of retail restructuring on consumer choice at the local level. Whereas the previous paper was based on quantitative evidence from survey research, this paper draws on the qualitative phases of the same three-year study, and in it we aim to understand how the changing forms of retail provision are experienced at the neighbourhood and household level. The empirical material is drawn from focus groups, accompanied shopping trips, diaries, interviews, and kitchen visits with eight households in two contrasting neighbourhoods in the Portsmouth area. The data demonstrate that consumer choice involves judgments of taste, quality, and value as well as more ‘objective’ questions of convenience, price, and accessibility. These judgments are related to households' differential levels of cultural capital and involve ethical and moral considerations as well as more mundane considerations of practical utility. Our evidence suggests that many of the terms that are conventionally advanced as explanations of consumer choice (such as ‘convenience’, ‘value’, and ‘habit’) have very different meanings according to different household circumstances. To understand these meanings requires us to relate consumers' at-store behaviour to the domestic context in which their consumption choices are embedded. Bringing theories of practice to bear on the nature of consumer choice, our research demonstrates that consumer choice between stores can be understood in terms of accessibility and convenience, whereas choice within stores involves notions of value, price, and quality. We also demonstrate that choice between and within stores is strongly mediated by consumers' household contexts, reflecting the extent to which shopping practices are embedded within consumers' domestic routines and complex everyday lives. The paper concludes with a summary of the overall findings of the project, and with a discussion of the practical and theoretical implications of the study.

Residential Consumer Switching and Electricity Restructuring Policy: The Pennsylvania Power Market

Without significant price reduction, high consumer switching rates to competitive power suppliers have been criticized as a result of either the artificially high price to compare (PC) acting as the benchmark price that competitive generators must meet, or the critical mass effect from switching consumers. This paper builds a simple model to explore how the restructuring policy determines residential switching behavior. When the PC increases over time, whether it reflects the rising wholesale price adequately or not, a consistent price reduction policy will naturally induce an early-stage high switching rate. In contrast, a required switching rate policy that is associated with both an artificial price cut at the early stage and a longer period of stranded cost recovery can accelerate switching effectively. Two high-cost Pennsylvania utilities, which demonstrate opposite movements of residential switching rate under different restructuring policies, are examined to confirm that the high switching rate just results from the policy design, not from the subsidy in PC discussed in (Joskow, Paul L. “Why Do We Need Electricity Retailers? Or, Can You Get It Cheaper Wholesale?” Center for Energy and Environmental Policy Research, MIT, Revised discussion draft, 2000b), or the critical mass effect concluded in (Reitzes, James D., Lisa V. Wood, J. A. Quinn, and Kelli L. Sheran. “Designing Standard-Offer Service to Facilitate Electric Retail Restructuring.” The Electricity Journal 15, 9, 2003, pp. 34–51). Switching rates play no role in evaluating the success or failure of a restructuring.

New Cultures, New Strategies, New Formats and New Relationships in European Retailing

During the last fifteen years there has been a substantial restructuring of retailing in Europe. The implications of this reach beyond Europe. The restructuring involves not only competitive relationships amongst retailers but also involves new forms of relationships with suppliers. A new perspective of the role of retailing is emerging that places retailing in a global framework of international store operations, international sourcing of products, international flows of management and managerial know-how, and international awareness by consumers of the retailers who are becoming international brands. The aim of this paper is to place the restructuring in context, to consider the nature of it and to explore how the new global framework will begin to have effects for distribution industries in Asia.

Keeping up with Retail Access? Developments in U.S. Restructuring and Resource Procurement for Regulated Retail Service

Retail access states have been reaching a key milestone: the end of the initial “transition period,” after which utilities generally are required to use competitive processes to procure supply for their continuing obligation to provide retail service at regulated rates. The authors present a survey of the current state of U.S. retail restructuring, discuss the policy challenges faced as the initial transition periods end, and document how distribution utilities are procuring power for customers who have not selected alternative suppliers.

International Retail Restructuring and Divestment: The Experience of Tesco

A key purpose of this study is to explore the lessons learned from international retail divestment and market withdrawal experiences. Drawing on 33 in-depth interviews with leading investment banks and key retail executives at Tesco, the study investigates the company's international restructuring and divestment activities in Ireland and France during the mid -1980s and 1990s. It has been demonstrated that, despite the progressive merger and acquisition wave sweeping through the corporate retail landscape recently, international retail divestment is quite widespread. The main conclusion from this study is that Tesco originally did not envisage divestment or de-internationalisation as part of the original internationalisation strategy process in either the acquisition of Three Guys in Ireland or Catteau in France. There was no appreciation from Tesco during their early period of expansion of the fact that exit pressures might arise during the course of market entry. In this regard, the case study provides insights into the relationship between investment and divestment within the context of international retail restructuring. The case evidence also demonstrates the positive impact of the Three Guys and Catteau divestments which helped management to refocus and rejuvenate the company's internationalisation process.

Bigger stores, more stores, or no stores: paths of retail restructuring in rural America

Changes such as the development of large international retail chains, retail concentration, locational changes, technological innovation, new labor practices, and the increasing scale of individual stores, have revolutionized the retail sector. This broad restructuring will have profound impacts in rural America because employment in retail is a major component of the rural economy. Presented here is an analysis on the varied paths of retail restructuring between 1988 and 1999, with a focus on changes in the geographic distribution and size of retail establishments in America's nonmetropolitan counties. The results show that the restructuring process in retail differs throughout the US, and that broad generalizations on the nature of restructuring, and its impacts, must be reconsidered.

Retail restructuring: a geomatics-based analysis of the home improvement sector

Retail restructuring: a geomatics-based analysis of the home improvement sector

Retail Restructuring in Polish Transitional Economy

This paper consists of two sections. The first provides a general outline of transformation processes in retailing on the national scale in the years 1988–98. Special attention is paid to the factors of retail development and stores privatisation, foreign entrepreneurship in retailing, stores fragmentation and changes in assortment. The second section comprises the empirical case study of a small town in which the changes in retailing and services observed can be studied on the micro‐scale. The changes include an increase in the number of facilities, privatisation processes, changes in assortments, emergence of new crafts in services, changes in location and early stages of capital concentration.