The evolution of the grocery retail landscape in a megacity in emerging markets. The case of Mexico City

Abstract

This dissertation is concerned with the development of three studies that aim at developing a better understanding of the evolution of the grocery retail landscape in a megacity. Urban areas like Mexico City are significant for businesses since they concentrate wealth and business opportunities. The grocery retail landscape in Mexico City is composed of approximately 90.000 grocery retail (GR) stores that are classified into three categories: modern channel stores (MCS), convenience chain stores (CCS) and nanostores, configuring a fragmented market in which all three types coexist.

The first study aims at conducting a comprehensive spatial statistical analysis of the grocery retail landscape of Mexico City to have a better understanding of the evolution of the GR channels over the past ten years. The second study proposes the taxonomy of the grocery retail stores for Mexico City, based on an empirical study conducted in Mexico City to facilitate the decision-making of the stakeholders of the grocery retail sector. In the third study, a physical mathematical model is proposed, inspired by a tuned mass-spring-damper (TMSD) system with three degrees of freedom and three masses, that simplifies the understating of the long-term behavior and interaction of the MCS, CCS and nanostores under economic shocks.

The results of the studies show evidence of the coexistence of nanostores, CCS and MCS regardless of the socio-economic level of the population in urban areas. Moreover, the results also show how operational and physical characteristics enable a more detailed classification of grocery retails stores, and relevant findings such as the costly perception trap for low socio-economic level (SEL) consumers based on the differences of store-image and the site selection. Finally, the TMSD model is presented as a blend between physical modelling and economic modelling in order to predict, with moderate error margins, the behavior in the grocery retail sector as evaluated under economic shocks of different levels.