Environment and retail structure

The purpose of this study is: (1) to identify the possible effects of basic market environmental factors upon retail structure in Japan, (2) to clarify the peculiarities of the Japanese distribution system, and (3) to study the evolution of retail structure over time. With this purpose in mind, the study was undertaken to examine retailing structure in relation to its environment on a comparative basis between the United States and Japan. Following the review and synthesis of the relevant literature, we presented a model that guided this study. The model consists of three environmental variables: (1) market size, (2) market variety, and (3) market density, represented by the following operational measures respectively: (1) population and per capita income, (2) enrollment in higher education, household income, and automobile ownership, (3) population density and urban density. These environmental variables were examined in relation to four dimensions of retailing structure: (1) number, (2) output, (3) scale, and (4) productivity of employees of retailing establishments. The operational measures for these dimensions are: (1) number of retail establishments per capita, (2) sales per capita, (3) sales per retail establishment, and (4) sales per employee. Our basic premise is: "Environmental factors will determine the number and output of retailing establishments. The relative magnitude of influence on them, in turn, determines the scale of retailing establishments, and the scale determines the productivity of employees." Under this basic premise, eleven hypotheses were formulated and tested in the empirical part of this study consisted of cross-sectional and trend analyses. The census data for the operational variables was taken for 47 prefectures in Japan and 50 states in the United States. For structural relations, simple and multiple regression analyses were applied, including stepwise regression and polynomial regression to check the relative contribution of the variables, and linearity of the relationships. The results in the five time periods, covering from 1966 to 1991 in Japan, from 1967 to 1992 in the United States, offer empirical support to the proposition that the retail structure is responsive to identifiable environmental variables in the two countries, although the strength and sensitivities of the fundamental relationships are different.