The Ongoing Evolution of US Retail: A Format Tug-of-War

Ali Hortaçsu, Chad Syverson

NBER Working Paper No. 21464
Issued in August 2015
NBER Program(s):The Industrial Organization Program, The Productivity, Innovation, and Entrepreneurship Program

We review major changes in the economics of the US retail sector over the past 15-20 years and discuss what these portend for the future evolution of retail. The sector has been shrinking in relative size over the long term, though this stopped around the onset of the Great Recession. Retail has experienced stronger-than-average productivity growth that has not been accompanied by commensurate wage growth. The main forces shaping the retail landscape in recent decades have been the expansions of two formats: e-commerce and warehouse clubs. While both formats have been the subject of study and discussion, we find evidence that warehouse clubs have had to this point a greater effect on retail than e-commerce has. This impact has been manifested in changes in the retail sector’s scale, concentration, dynamism, and urbanization. Thus while e-commerce will continue to expand and physical retail will further evolve in the coming years, the physical format is unlikely to meet its demise soon.

download in pdf format
   (437 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21464

Published: Ali Hortaçsu & Chad Syverson, 2015. "The Ongoing Evolution of US Retail: A Format Tug-of-War," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 89-112, Fall. citation courtesy of

Users who downloaded this paper also downloaded* these:
Goldmanis, Hortaçsu, Syverson, and Emre w14166 E-commerce and the Market Structure of Retail Industries
Courtemanche and Carden w17220 Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices
Bonaldi, Hortaçsu, and Kastl w21462 An Empirical Analysis of Funding Costs Spillovers in the EURO-zone with Application to Systemic Risk
Jarmin, Klimek, and Miranda The Role of Retail Chains: National, Regional and Industry Results
Guriev and Treisman w21136 How Modern Dictators Survive: An Informational Theory of the New Authoritarianism
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us