A Multipurpose Shopping Trip Model to Assess Retail Agglomeration Effects

Abstract

Multipurpose shopping is a prominent and relevant feature of shopping behavior. However, no methodology is available to assess empirically how the demand for multipurpose shopping depends on retail agglomeration or, in general, the characteristics of retail supply, such as the numbers and types of stores in a shopping center or the number of categories in a supermarket. The authors propose a nested-logit model that captures retail agglomeration effects on consumer choice of shopping trip purpose (what to buy) and destination (where to buy). The authors estimate parameters representing trip purpose-adjustment and between-store attraction effects on shopping trip data collected from a sample of 1704 households in The Netherlands. Both effects are significant for each of the three categories for which the model is estimated. This is consistent with the idea of agglomeration effects. The findings suggest that agglomeration helps attract not only multipurpose but also single-purpose trips. A comparison of multi- and single-purpose trip model predictions shows that single-purpose models underpredict the number of trips to larger shopping centers.