LARGE SCALE

RETAILING

MULTIPLE SHOPS (Chain shops/stores)It consists of many similar branch shops all over the country but under the control of headquarters.Every branch shop looks very similar as it is decorated in the same manner, has the same name and sells the same product line at standard price.Goods are normally on open display so that shoppers may personally examine/try if necessary (shoe & garments).Terms of sales are cash or credit/debit cards.Most of the chain stores employ self service e.g. KFC, Bata, McDonald’s, Reef Side, etc.If a customer is dissatisfied with the goods bought, these can usually be exchanged at any branch.

i. Various shops selling similar range of products at _________ price and usually run by big manufacturers are called multiple shops.

ii. For easy identification, all multiple shops of the same manufacturer have similar display and_________ .

iii. Since all sales are on cash basis there is no risk of ___________ .

iv. Due to elimination of _____________ goods are available to customers at low prices.

v. The multiple shops are centrally managed by the _________ leading to lack of initiative on the part of branch mangers.

vi. Customers get standard quality and genuine goods through multiple shops leading to public_______ in the products.

vii. Multiple shops provide ________ variety of products for customers through their branches.

viii. These shops provide ________ of location through their presence in main markets and busy shopping centres.

same

decoration

bad debts

middlemen

head office

confidence

limited

convenience

Merits Demerits

Uniform in style and design (Retailer)Low prices as middlemen’s profits are eliminated (customer)Low operating expenses (retailer) Stock of one branch can be transferred to other branches (retailer)Centralized control (retailer)Establishment of branches near customers’ residences (customer)

Limited varieties (customer)No individual or personal attention (customer)Difficulty in supervision (retailer)No credit facilities (customer)Lack of initiative as branch manager has to work as per the direction of head office (retailer)

DEPARTMENTAL STORE•A department store sells a wide range of goods. It consists of many departments all housed in one building, normally located in the city centre.•All departments though run individually, are under the control of central management.•Each department specializes in a particular line of product. E.g. clothing, foodstuffs, stationery, etc.•Many conveniences are provided to shoppers e.g. toilets, rest room, telephone booths, cafes, internet access, etc.•Attractive window display with prices clearly marked. Goods are sold on fixed prices.•A high standard of service is given in department stores; there are many assistants to give advice.•Terms of sales are cash or credit/debit cards.

i. A departmental store is a retail shop where different goods are sold at different counters/departments in the same building.

ii. The different departments like electronic goods, garments etc are managed separately for convenience of control.

iii. There is direct contact between the customers and the owners of the department store through various departments. iv. Departmental Stores offer additional services to customers apart from the goods available for sale.

v. These stores are conveniently located in residential areas for the benefit of large number of customers.

vi. Departmental stores offer goods at high prices to customers due to the high cost involved in maintaining and operating the store as well as providing various facilities for customers.

True

False

False

True

False

True

Merits Demerits

Customers can do one stop shopping (customer)One department advertises for the other (retailer)Enjoys the advantage of large scale buying (retailer)Customers are assured of high quality goods (customers)Cost per unit becomes low (seller & customer)Provides recreation facilities (customer)

High operating cost and overheads (retailer)Risks of holding large stocks (retailer)Heavy capital investment to set up (retailer)Expensive and inconvenient to visit from long distances (customer)

SUPER MARKETS•It is actually a big department store (having a floor space of more than 250 sq.m), selling a wide range of foodstuffs, daily household items, household durables, drapery, stationery, etc.•The purpose is to encourage one stop shopping and aim is to encourage quick turnover.•Goods are attractively displayed and are in easy reach of the shoppers.•Super markets provide many conveniences to the customers like car parking, toilets, telephone, web access, etc.•Terms of sales are cash or credit/debit cards.

(i) Like department stores, super markets also sell a variety of goods in one building only.

(ii) They are organized as public limited companies where the shareholders provide the capital.

(iii) Goods are sold on credit basis for the convenience of the shoppers.

(iv) Super markets cannot afford to hire professional managers leading to inefficiency in their operations.

(v) To provide goods at cheaper rates, super markets offer inferior quality goods for sale.

True

True

False

True

False

Merits Demerits

Impulsive buying (retailer)Enjoys the benefits of large scale buying (retailer)Lower prices comparative to other stores (customer)Freedom to customer in selecting goods (customer)High turnover and high profits (retailer)

Distant location (customer)Lack of personal advice (customer)No credit facilities (customer)Pilfering and shop lifting (retailer)May become gossip centre (retailer)

HYPER MARKETS •This is twice as large as a supermarket is (occupying an area of 500 sq.m) offering a great variety of foodstuffs and a fairly wide range of other goods at very competitive prices.•The purpose is to encourage one stop shopping and aim is to encourage quick turnover.•Goods are attractively displayed and are in easy reach of the shoppers.•Hyper markets provide many conveniences to the customers like car parking, toilets, telephone, web access, etc.•Terms of sales are cash or credit/debit cards.

Merits Demerits

Impulsive buying (retailer)Enjoys the benefits of large scale buying (retailer)Lower prices comparative to other stores (customer)Freedom to customer in selecting goods (customer)High turnover and high profits (retailer)

Distant location (customer)Lack of personal advice (customer)No credit facilities (customer)Pilfering and shop lifting (retailer)May become gossip centre (retailer)

Identify the type of large scale retail trade the following sentence refer to :

(i) Sale of goods is through different outlets located at different places.

(ii) Goods are generally available at a price higher than its market price elsewhere.

(iii) The stores are mostly controlled by a group of shareholders.

(iv) A number of facilities are offered to customers apart from the product for sale.

(v) Goods of the same type are sold to customers.

Multiple Chain Store

Department Store

Super Market

Department Store

Multiple Chain Store

In the following sentences relating to large scale Retail Trade choose the suitable word(s) from those given in brackets :

(i) Goods are generally purchased in bulk from __________ ( manufacturers, middlemen) for sale to the consumers.

(ii) Goods are made available to consumers mostly _____________(under same roof, in different shops)

(iii) It sells goods to _________(limited, large) number of customers.

(iv) Goods are sold on _________ (credit, cash) basis to customers.

(v) The amount of capital investment required in large-scale retail trade is ________ (mostly equal to, much greater than) the capital investment in local retail shops.

manufacturers

under same roof

large

cash

much greater than

SMALL SCALE

RETAILING

INDEPENDENT RETAILER•Independent retailers are those who own or rent and run their own shops. •Deals in a wide variety of goods.•Located normally in the residential areas.

Merits Demerits

Independent management (retailer)Convenient opening hours (retailer)Personal service (customer)Credit service (customer)Delivery service (customer)

Normally a bit expensive (customer)Lower stocks (retailer & customer)No self service (customer)Low capital (retailer)

STREET MARKETS•These are normally set up in less developed areas and are not supposed to be opened every day. •These markets are set up by those who cannot bear overheads.•Normally sell agricultural products.•Practically no establishment cost required.

Merits Demerits

Very less capital required (retailer)No or minimal operating costs (retailer)Low prices as middlemen’s profits are eliminated (customer)Farm fresh goods (customer)

No after sales service is given (customer)No return or claim(customer)No credit facilities (customer)

Non-Store Retailing

MAIL ORDER BUSINESS

The entire process is carried out through the postal system.

Buying and selling takes place without any face-to-face contact between the buyer and the seller.

Seller advertises the products giving detailed description of the goods, mode of payment, terms of sales, etc. in the newspapers, magazines, letters, catalogues, etc.

Seller receives order from the buyer by post.

Seller sends the properly packed goods to the buyer through value payable post (VPP).

The seller receives payment through post office.

No middleman is involved in the process.

Merits Demerits

Less operating cost (retailer)Such a trade does not need expensive high street premises (retailer)The catalogues provide with a permanent shop window in many homes (retailer)Goods are delivered at the doors (customer)

No personal contact and inspection of goods (customer)Confined to literate people only (customer)Scope of cheating (customer)Heavy packaging and postal charges (retailer)High advertising cost (retailer)

TELE SHOPPING•Prospective buyers are contacted through telephone and persuaded to buy products.•In some cases producers advertise their products on television or other media. They clearly explain the features and also make live demonstration of the products.•The price and code number (if any) of the products and the telephone number of the sellers are displayed on the screen.•As a customer, you are supposed to dial the telephone number and give your order. They will deliver the goods at the desired place on receipt of the payment. •Asian sky shop and tele-brands are the examples of those doing tele-shopping business in our region.

Merits Demerits

It saves time, money and effort in placing a written order to buy the goods. (customer & retailer)Low prices as middlemen’s profits are eliminated (retailer & customer)Buyers can inquire about the terms and conditions of sale, mode of payment, packaging etc. from the sellers without visiting the seller’s place. (customer)

Since orders are received orally on telephone, there is no record of dealings. Thus, disputes over terms and conditions of sale may be difficult to resolve. (customer & retailer)No facility is available for inspection of goods offered for sale. Hence the risk of fraud and dishonesty is unavoidable. (customer)The seller may provide misleading information regarding products to attract the customersCredit facility is not available to the buyers. (customer)Heavy packaging and postal charges (retailer)High advertising cost (retailer)

(i) In mail order business, the seller approaches the customer through catalogues, magazines, television etc. to tell him/her about the product.

(ii) Mail Order Business can be successfully operated through telephone and television channels and does not require use of postal services.

(iii) Goods like jewellery, fruits and vegetables, foodgrains generally use mail order business for sale to customers.

(iv) Teleshopping saves time and effort as order can be placed over the telephone.

(v) Exchange of goods is easily possible in case of teleshopping.

(vi) Risk of fraud and dishonesty is present in Teleshopping as the consumer does not get the opportunity to inspect the goods before purchase.

True

False

False

True

False

True

AUTOMATIC VENDING MACHINE•Automatic vending machine provides round-the-clock facility to the customers for purchase of goods. These machines are normally placed at convenient location, near railway stations, bus terminals, busy shopping centres etc. •By inserting a coin or token in the automatic vending machines, you can buy certain specified goods. •This system of retailing is popular in some developed countries through which soft drinks, chocolates, milk, ice cream, soup, newspaper, etc. are sold to a large number of customers.

INTERNET SHOPPING•The seller or manufacturers provides all information regarding the product, its specification, uses, etc. through its website. •A customer can access the website and view different products according to his need. Then he can compare the price of similar products available and also give special instructions to the seller regarding the goods. •Customer has to make all payments through credit card. On receiving order the supplier or seller delivers the goods at customer’s place through postal service or courier. •For all these you need to have a computer at your home with Internet connection. You can also give order from the cyber cafes.•This type of retailing is also called ‘on-line shopping’. This is suitable for selling books, magazines, journals, software, health and beauty care items, etc.

i. To buy goods any time during the day or night, a convenient mode is ________ .

ii. The desired goods can be bought by inserting ___________ in the automatic vending machine.

iii. Credit cards are used for purchase of products through _________________ .

iv. To buy books or magazines from anywhere in the world, _________ may be the preferred system of retailing.

v. Advertisement about the product is not required in____________.

vi. Time and effort of ___________ is saved in on-line shopping.

vii. The limitation of automatic vending machine is that the _______ is very expensive.

viii. Knowledge of computers is required to buy goods through _______________

automatic vending machine

coins/tokens

Internet

internet shopping

automatic vending machine

customers

machine

internet

Basis Department Store Multiple Shop

Location These stores are located at the central places.

These shops are located at different location nearthe customers.

Decoration Adopt different decoration as decided by the owners.

Uniform, decoration and appearance as decidedby the head office.

Varieties of goods Deals in a wide variety of goods of different manufacturers.

Deals in a few items of one manufacturer.

Price of goods Price of goods is high and differs from one department store to another.

Price is uniform in all the shops.