Types of retailers

In this tutorial we will look into different types of retailers who are both small and big.

Small-scale retailers

1. Street Stalls -These are shops with very limited space as they are usually constructed on any available space on a busy street, They are usually of a permanent nature. They are owned by independent retailers or are small partnership firms.

2. Stalls in Markets -These are small shops in specially constructed markets such as the stalls in the Male’ local market. The space is limited.

The great advantage of such a stall is that likely buyers are always passing by. Such stalls may be permanent or as in the case of weekly markets in villages, temporary. These are generally owned by the sole trader or by partnership firm.

3. Co-operative Stores – These may be run on a small or large-scale basis. a co-operative is a non-profit making voluntary organisation where members associate on the basis of equal rights to obtain economic and social benefits for themselves.

4. Independent Retailers or Sole Traders – These include grocers, bakers, greengrocers, fishmongers, etc.; and those who deal in miscellaneous articles in universal demand; such as cloth shopkeepers, book-sellers, small stores stocking articles such as sticks, umbrellas, boots, shoes, hats, gloves, toys, etc.

These private shopkeepers play in important part on the retail market. Through their display and salesmanship and personal contact with the customer they create a demand, which demand is met by selling in small quantities as required by the customers. They even grant credit to their customers and receive the amount by installments. These small retail shopkeepers are popular, and carry on a good trade in spite of large organizations, such as department stores, competing against them because they are in a position to give personal and detailed attention to the wants of their customers, as they are personally acquainted with the customers of the locality. These retail shops have to meet intense competition in proprietary and branded articles belonging to producers and manufacturers.

The retail shopkeeper frequently deals in perishable goods, and that is one other reason why he is anxious to see that his turnover is rapid, so that he may not suffer as loss through the stock getting stale.

5. Second-hand Dealers – These usually sell books, clothes, furniture, motor-cars, etc. and do very good business as they cater to the needs of the majority of people who cannot afford to buy new goods. These are owned by sole- traders or partnership firms.

6. Hawkers and Peddlers – They carry a very limited stock which they get from wholesalers or local retailers and move about from locality to locality. They are usually found on busy street corners. The goods they sell are generally of inferior quality and temptingly priced. As they are rarely found again in the same spot there is no question of any guarantee given or complaint made.

The price is seldom fixed. Fruit, toys, pens, handkerchiefs, hair-pins, combs, etc. are the type of articles applied to a person who has a handcart or animal for transporting and displaying his goods, while a pedlar is one who carries the goods himself. The peddler is usually on his own but hawkers sometimes work in partnerships.

Specialty stores– are small stores which specialize in a specific range of merchandise and related items. Most stores have an extensive depth of stock in the item that they specialize in and provide high levels of service and expertise.

One of the key benefits of a specialty store is its focus on a single class of products. This gives owners and employees a chance to develop expertise and a reputation for knowledge and selection within the store’s defined specialty.

Specialty stores have an advantage when it comes to staffing and training. Employees only need to know or learn about one type of merchandise.

Large-scale retailers

Multiple shops or chain stores Departmental Stores
Super Markets Hyper Markets

Multiple Shops or Chain Stores

Examples of Multiple shops: Halfords, Richard Shop, W.H Smith, Tesco, Boots The Chemists, Marks & Spencer, and Burtons.
Features:

  • It consists of many shops where each shop is considered as a branch of the original shop which initially started the business.
  • Each shop is under the control of a branch manager.
  • The head office controls all the branch shops.
  • Every shop is decorated in the same manner, has the same name and sells the same goods at the standard prices fixed by the head office.
  • Chain stores mostly deal in one line of goods (clothes, food, shoes & medicine).
  • Stores mostly operate as public limited companies (However, multiple shops in Maldives like Ell Mobile and Golden Lane Shops are managed by private limited companies).
  • The head office sends out inspectors to make regular checks on all the branches.
  • There is centralized buying and administration and decentralized selling through branches.
  • Terms of sales are usually for cash

Advantages:

  • Centralized bulk buying enables the stores to get discounts from manufacturers. So they are able to sell goods to consumers at competitive prices.
  • They have large capital and are able to employ specialists in matters such as buying, publicity, window display, etc.
  • Losses sustained in one branch can be absorbed in the profits made by other branches
  • There is economy (lower average costs) of advertising as all the branches are included in one advertisement.
  • Slow-selling lines and surplus stocks in one area can be transferred to more promising areas, instead of clearing it off at a loss.

Disadvantages:

  • There is too much centralized control from the head office. Therefore, branch managers do not have any freedom.
  • Credit facilities are usually not offered, therefore the stores may lose customers.
  • There is lack of personal touch between branch shops and customers.

Departmental Stores

Examples: Harrods, Selfridges, Debenhams
Features:

  • It consists of many departments(each one is a shop by itself) all in one building.
  • Departmental stores are usually located in the centre of large cities.
  • Each department is managed by a manager and all are controlled by a General Manager.
  • Each department specializes in one line of goods. For example, hardware, hardware, clothes, food items, mobile phones, etc.
  • Since these types of stores are very large, they provide many facilities like toilets, restrooms, telephone booths, car parking area, for the convenience of the customers.
  • Goods are pre-packed and the prices are clearly marked.
  • Many departmental stores are usually owned by very large firms.

Advantages:

  • Departmental stores buy goods in bulk from manufacturers and are able to get discounts. Hence they can sell goods to consumers at competitive prices.
  • They have large capital and therefore they can employ specialists in areas such as buying, publicity, window display etc. Their large capital also allows them to advertise on a large scale.
  • There is economy in advertising as all the departments are included in one advertisement.
  • Losses sustained in one department can be absorbed in the profits made by other departments.
  • Conveniences such as lounges, car parking areas and restaurants attract more customers.
  • Shopping can be done under one roof. This makes it very convenient for customers.

Disadvantages:

  • There are high overheads because of the many facilities provided. This increase in costs may increase prices as well.
  • As departmental stores are located at the centre of the cities and towns, high rental charges may increase unit price of goods.
  • There is very little freedom for individual departments as there is strict control from the general manager or head office.

Super Markets

Features:

  • These are self-service shops with floor space of more than 186 square metres.
  • They sell mostly food stuff and household goods.
  • Good are pre-packed and self-service is encouraged.
  • Amenities such as toilets, restaurants, and car parking areas are provided.
  • Supermarkets sometimes brand their own goods.
  • Prices are usually very competitive because of high rates of sales.

Advantages:

  • Departmental stores buy goods in bulk from manufacturers and are able to get discounts. Hence they can sell goods to consumers at competitive prices.
  • Self-service reduces sales staff requirements and this reduces wage costs.
  • Customers benefit from quick service as the goods are pre-packed and well displayed.
  • Supermarkets buy from manufacturers who brand the goods using the supermarkets’ own labels.
  • Customers are attracted by the facilities and large variety of goods provided by supermarkets.

Disadvantages:

  • Self-service encourages pilfering and shop lifting. (However, technology has now enabled to prevent this ).
  • Customers do not enjoy any personal service.

Hyper Markets

Examples: Asda, Tesco, Sainsbury.
Features:

  • Hypermarkets usually have more than 5000 square metres of selling space.
  • A very large commercial establishment that is a combination of a department store and a supermarket.
  • They buy directly from manufacturers and sell at competitive prices.
  • Hypermarkets are usually found outside towns and cities.
  • They provide large car parking space.
  • Goods are pre-packed, well displayed and self-service is encouraged.
  • To encourage non-car owners, they often provide bus services to and from the hypermarkets.
  • Amenities such as lounges, swimming pools, restaurants and childcare centres are provided to make shopping comfortable for customers.

Advantages:

  • Hypermarkets stores buy goods in bulk from manufacturers and are able to get discounts. Hence they can sell goods to consumers at competitive prices.
  • Self-service reduces sales staff requirements and this reduces wage costs. displayed.
  • Customers are attracted by the facilities and large variety of goods provided by hypermarkets.
  • Free bus service to and from the hypermarket.
  • Large car parking area for the customers.
  • Shopping can be done under one roof.

Disadvantages:

  • Hypermarkets lead to decline of business in town centres
  • Self-service encourages pilfering and shop lifting. (However, technology has now enabled to prevent this ).
  • Customers do not enjoy any personal service.

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