The revenue and logistics costs of convenience store chains in Taiwan

Pei Chun Lin, Chia Jung Lin, Chung Wei Shen, Jenhung Wang

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

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.

Original languageEnglish
Pages (from-to)1255-1273
Number of pages19
JournalInternational Journal of Retail and Distribution Management
Volume48
Issue number11
DOIs
Publication statusPublished - 2020 Oct 10

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Marketing

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