The revenue and logistics costs of convenience store chains in Taiwan
International Journal of Retail & Distribution Management
ISSN: 0959-0552
Article publication date: 6 July 2020
Issue publication date: 10 October 2020
Abstract
Purpose
The objectives of this study were to demonstrate that the high-density 7-Eleven c-stores in Taiwan benefit from economies of scale in distribution and can, therefore, leverage the logistics costs; and to decide the proper locations for the future inauguration of c-stores.
Design/methodology/approach
The study spatially analysed the c-stores located in Tainan, Taiwan and examines the influence of spatial configuration on c-store revenue. This study developed models to quantify the revenue and logistics costs that the 7-Eleven convenience store (c-store) chain encountered when adopting a high-density expansion strategy. The revenue models’ parameters were calibrated utilizing data collected from financial statements in 7-Eleven chains’ 2015 corporate annual reports and modelling was used to quantify the influence of agglomeration forces and the distance separating c-stores on revenue.
Findings
Positive agglomeration forces increased 7-Eleven’s company-wide sales and the average daily revenue of its individual c-stores, and decreased those of competitors. The study findings demonstrate the high-density 7-Eleven c-stores in Tainan benefit from economies of scale in distribution and can, therefore, leverage their logistics costs. The spatial analysis concluded that higher-density and higher-revenue c-stores were spatially clustered.
Originality/value
The study extends the use of analytical revenue and spatial models to decide the proper locations for the future inauguration of c-stores.
Keywords
Acknowledgements
The authors gratefully acknowledge the helpful comments of the editor and the reviewers who provided valuable input and comments that have contributed to improving the content and exposition of this paper. This research was supported in part by grants from the Ministry of Science and Technology of the Republic of China in Taiwan under grants MOST 104-2410-H-006-080- held by the first author.
Citation
Lin, P.-C., Lin, C.-J., Shen, C.-W. and Wang, J. (2020), "The revenue and logistics costs of convenience store chains in Taiwan", International Journal of Retail & Distribution Management, Vol. 48 No. 11, pp. 1255-1273. https://doi.org/10.1108/IJRDM-12-2019-0402
Publisher
:Emerald Publishing Limited
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