Chapter 11

Chapter 11 - Nature of Retailing Retailing includes all...

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Nature of Retailing Retailing includes all transactions in which the buyer intends to consume. A Retailer: Must derive more than 1/2 of their sales from the ultimate consumer of the product to be classified a retailer (less than 1/2, then they are a wholesaler ). 1.51 million retailers in the US. The number of retail establishments has remained constant over the last 20 years, but the sales volume has increased *4. 14.67 million employees in the US are involved in retailing. Classification of Retail Stores According to 5 Criteria: Form of Ownership Sole Proprietor (majority #s) Corporate Chains Contractual Chains Franchising Types of Merchandise Offering Merchandise mix, breadth (variety); depth (selection in product) o Limited-line stores-----> Sporting Goods Stores etc. o Single-line stores------> Specialty Retailers Foot Locker, Radio Shack. ..Category Killers. ..Borders Books, Toys R Us etc. o General merchandise stores Department stores Competition from discount stores and specialty have put pressure on department stores. Some department stores are cutting services, offering basement discounts (competing with discount stores), others are remodelling and opening designer departments and boutiques (competing with specialty stores). Others increased services, IE restaurants. Leased departments, leased to entrepreneurs. o Supermarkets. .. Superfresh etc. Supermarkets are adding high turnover non-food items to offset low margins of food items. Added delis and hot pizza etc, in response to societal pressure (fast food). Also competition from convenience stores, 7-11 etc. o Hypermarkets. ..success in europe, not in US 40% food, 60% general merchandise WalMart (222,000 Square feet, $2.5m per week) moving more toward supercenters. o Supercenters. ..merchandise/groceries Wal Mart's projected high growth area of 1990s. Getting away from Hypermarkets. 80% of shoppers shop both sides of store. Use groceries to attract customers (traffice generaters), hoping they purchase high margin items.
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o Discount Stores. ..Wal-Mart, KMart Developed in the 1950s when the post war supply for goods caught up with the demand for goods. Departmentalized, volume retailers. o
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Chapter 11 - Nature of Retailing Retailing includes all...

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