Rethinking the role of the retail sector in economic development

This article critically reviews the widespread notion that the retail sector is a 'dependent' activity, reliant upon the supposedly more 'productive' sectors of the economy for its survival. Through a critical evaluation of the source of this belief 'economic base' theory the ability of locally-oriented enterprises to curb the seepage of income from an area is revealed to be as important to economic development as the external income generating function of outward-oriented industries. Consequently, retailing Is redefined as contributing to economic development not only in its much neglected role as a basic activity which generates external income but also in its non-basic locally-oriented function of preventing the leakage of money out of an area. To show this in operation, case studies are presented of a particular local economy, a large-scale retail development and cross-national shopping.