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Lecture 5

Lecture 5-February 5-Urban Retail Hierarchy

Course Code
Herbert Kronzucker

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Lecture 5: February 5
Key Geographical Concepts
Demand and Distance: Spatial Demand Curve
?Fig. 2.2
?Fig 2.3: shopping for convenience goods is more sensitive to distance than for shopping goods.
Low order goods (eggs, milk) low distances frequent visits
High order goods (shoes, furniture, etc) longer distances infrequent visits
The Intra-Urban Retail Hierarchy
Eg. Medical: doctor offices (close by) clinic hospital large specialized hospitals (longer
Eg. Educational. Elementary middle school high university
Retail. Convenience store grocery store shopping mall.
Retail characteristics and distributions within urban areas show a hierarchical pattern. At the bottom end
of the hierarchy we have a large number of small convenience stores which are closely spaced and sell
basic (low order) goods (ie bread, milk, eggs) to customers who travel to the store quite frequently over
short distances. At the top end of the hierarchy we have a small number of very large regional shopping
centres which are widely spaced and sell high order goods (eg fashion goods, shoes, furniture, etc) to
customers who travel to the centres relatively infrequently over long distances. In between these two
extremes we have a gradation of size and characteristics. The hierarchy suggests a relationship between
the following characteristics:
x Number of stores/centres
x Size of stores/centres
x Order (type) of the goods sold (low/high order)
x Spacing of the stores/centres
x Frequency of the visits by consumers
x Distance traveled by consumers
This hierarchy can be compared to that of settlement system (see the discussion of Central Place Theory
which attempts to model this). Inter-urban hierarchy a theory about the size, spacing, and function of
Fig 8.5 Inter-urban hierarchy
x Desire lines: join the origin to their destinations.
x Grocery shopping (low range), hospitals (high range)
Importance of Location and Competition: Hotelling Model
Case 1
A comes in first, then B comes in.
3rd case may be teh worst because the distance is maximized and the people at the edge might not want to
come now. Now they will go in a price war. Also another business might want to come in.
A much better strategy is to locate apart giving each other half the market so no price war. (cooperation)
Eaton Centre is atypical because it is vertically developed since there is not much space but the land is
very accessible.
Accessibility and the Value of Location:
The Bid Rent Model (Trade off Models)
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