The used‐vehicle superstore: a flawed concept

In the early 1990s, several new entrants extended “category‐killer, big‐box” retailing concepts to the marketing of used vehicles. Despite promise, each entrant has either exited the market or changed its business plan. Based on both primary and secondary data, the authors find that, although the superstore maintains some advantages over traditional used‐vehicle retailers, it has cost disadvantages over the traditional retailer. These findings on both the demand and the supply side of the business explain the observed market failures.