(a) Explain five advantages of large scale retailing
(b) State five characteristics of each of the following:
(i) Department Stores
(ii) Supermarkets.
Explanation
(a) Advantages of Large Scale Retailing:
(i) They enjoy economies of scale because of their size
(ii) They can buy in bulk and sell in bits
(iii) They can afford to carry out more extensive advertising to increase sales.
(iv) Their size ensures that they sell only on cash and carry basis which ensures no bad debt.
(v) The risk of the business is widely spread, loss in one branch is covered by other branches.
(vi) They can employ competent/specialist staff to run their operations.
(vii) They have access to larger capital, to improve operations which may increase profit.
(viii) Their size makes one stop-shopping possible/stock variety of goods.
(ix) They provide after sales services, which are beneficial to consumers.
(x) They facilitate electronic buying and selling (e-Commerce).
(xi) Only few sales attendants are needed because of self-service.
(b) Characteristics of departmental stores
(i) They are usually located in large towns and cities.
(ii) Each department is operated as a separate unit e.g. electrical, clothing, cosmetics etc.
(iii) Each department is under the control of a manager who is also responsible for buying.
(iv) Various facilities are provided for customer comfort e.g. restaurant, car parks, etc.
(v) Large premises are used.
(vi) The layout is arranged so that, frequently purchased goods (fast moving goods / convenient goods) are easily accessible by being on the lower floors.
(vii) Shopping under one roof makes it convenient for one stop-shopping.
(viii) Goods are tagged with prices.
(ix) Sales are by self-service/less sales personnel are required.
(x) They do not sell on credit.
(xi) Payment is centralized at the point of exit.
(b)(ii)The Characteristics of Supermarkets
(i) Goods are tagged with prices and displayed on open selves in supermarkets.
(ii) Goods are sold mainly by self-service
(iii) Check out desks are provided for paying for goods purchased
(iv) Trolleys and baskets are provided for customers
(v) Wide variety of mostly household goods are on sale especially food products (groceries).
(vi) They are usually situated in highly populated residential areas/cities
(vii) They operate on cash and carry basis.