The Impact of Chain Collapses on Retail Agglomeration

Abstract

We analyse the impact of retail closures on the dynamics of consumption amenities in British cities from 2007 to 2023. Using granular spatial data tracking the universe of store locations, we implement a staggered difference-in-differences estimation leveraging on random local variation caused by national retail chain collapses. Our results show that shop closures led to elevated vacancy rates post-closure, both on affected streets and in neighbouring areas. Furthermore, we observe changes in the sector composition of replacement shops, with a higher prevalence of stores belonging to chains and a decrease in independent stores. Using data on valuations of commercial properties, we provide a preliminary quantification of the economic consequences that closures had in the retail centres. Joint paper with Julia McGee and Elisabet Viladecans-Marsal.