Retail Redlining: Definition, Theory, Typology, and Measurement

Abstract

Retail redlining is a spatially discriminatory practice among retailers, of not serving certain areas, based on their ethnic-minority composition, rather than on economic criteria, such as the potential profitability of operating in those areas. Consequently, consumers in these areas often find themselves “vulnerable” because no other retailers will serve them, or they are exploited by other, often smaller, retailers who charge them higher prices and/or offer them inferior goods. What makes retail redlining worthy of scrutiny is that whereas redlining is illegal in the financial industry, retail redlining is still legal in the retailing industry. There are, however, lawsuits and lobbying efforts under way that seek to make this practice illegal. In this article, the authors define retail redlining, identify eight different commonly seen variations of it, look at both sides of the argument on this practice, and finally suggest a methodology for empirically verifying this practice.