An empirical examination of clustering and dispersion within Canadian shopping centers

• Clustering service stores near mall entrances.
• Clustering comparison shopping stores at corridor intersections and on 2nd story.
• Clustering in ladies' wear, jewellery, and unisex clothing store categories.
• Clustering depends upon the size, age, and type of mall.
• Transportation costs and demand externalities drive store location in malls.

In this paper, data on the internal compositions of 90 planned regional shopping centers in the five westernmost provinces in Canada are used to examine the locational pattern of stores in shopping centers, to see whether these locations are consistent with exploiting demand externalities and the physical features of the mall. The empirical relevance of so-called “rules of thumb” for locating stores in shopping centers is also assessed. We find that there is clustering of service stores near mall entrances, and clustering of comparison shopping stores near corridor intersections and on the second floor of two-story malls. Clustering tends to occur in the ladies' wear, jewellery/fashion accessory, and unisex clothing store categories, facilitating comparison shopping. Clustering of stores in the service category facilitates multipurpose shopping. A regression analysis indicates that clustering may depend upon the size, age, and type of mall in question. Overall, results are consistent with consumer transportation/shopping costs and demand externalities driving the internal store location strategy of planned regional shopping centers.