The Declining Rate of Return on Capital in US Retailing

Abstract

Retailing is the marketing institution with which consumers have the most immediate and frequent contact. As such, consumers should be concerned with how the behaviour and performance of retailers will impact on them. While the consumer may not be explicitly aware of it, the rate of return (RoR) on capital invested in retailing has both instantaneous and temporal impacts on consumer well‐being. When the RoR is high, relative to the cost of capital, retail prices are probably higher than they need be. However, this high RoR may persuade other investors (i.e. potential retailers) to enter the market, thereby eventually lowering prices and increasing product availability.

Citation

Ingene, C.A. and Lusch, R.F. (1981), "The Declining Rate of Return on Capital in US Retailing", International Journal of Physical Distribution & Materials Management, Vol. 11 No. 1, pp. 25-39. https://doi.org/10.1108/eb014484