Assortments and local competition in retailing

We study the impact of local competition on assortments' attractiveness. The first aim of our paper is to provide a simple and reproducible way to delineate a store trading area using widely available census data. The second aim is to develop a model of retail sales that takes into account competition intensity as well as assortment composition factors (namely price level and variety). We use spatial econometrics techniques (SAR model) in order to account for proximity between stores.