Further reflections on the Golden Age in British multiple retailing 1976-1994: capital investment, market share and retail margins

Our understanding of the ‘Golden Age’ of British retailing, during the period from the mid1970s through to the mid-1990s, has centred around a discussion of the impact that a rising retail concentration and a perceived increase in retailers’ market power has had on social welfare and competition policy. This increase in concentration and market power is itself understood to have evolved from the defining feature of the golden age, a rapid increase in capital investment by large-scale retailers. This paper examines the role played by capital investment in the golden age and demonstrates that whilst capital investment is negatively correlated with turnover it is positively correlated with both margins and market share. It is suggested that this relationship is significant as it provides evidence that the golden age of retailing did indeed lead to the rise in market power much of the literature feared was taking place.