Chapter 9

Large scale retailing

advantages of retailing on a large scale :

Large scale retailers with many branches have a large turn over. This enables them to buy in bulk directly from the manufacture and thus obtain goods at discounted prices. This enables them to charge lower then average prices to consumers. They can also offer special promotions and lost leaders to their costumers.

Large scale retailers can afford specialist employees. Buyers who purchase for the company as a whole, accountants who monitor cost, estate managers, and surveyers who look for suitable sites. within a large shop, employees may specialise. Hence, becoming more effiencients at what they are doing.

Retailing on a large scale enables greater use of computerized system. Stock control can be more accurate and money is not wasted on surplus stock. Breaking bulk and re-packaging can be under taken there. So large scale retailers can have their own delivery vehicles. These will be used to supply their shops and also increasingly to deliver to costumer who have purchased online. Since large scale retailers have enermous purchasing power these companies can lay down specific standards for their supplyers and insist that they are maintainent.

Many large scale retailers are public limited companies. This makes it possible for them to raise the large amount of capital necessary for setting up and expanding their retail businesses.

The major advantage of large scale retailing is economist of scale, the benefits of size. As the business becomes larger, the cost per unit such as advertising and wages fall.

Disanvatages on a large scale :

The growth of large scale retailing has meant a decline in personal services for the consumers. Most large scale retailers use of service methods but many of these retailers are not recognizing the need for some form of costumer contact and are introducing some counter service and information desk in their shops.

Many consumer complain about products being standardise and mass produce. often the products are free package and it is difficult to buy individual items. large scale retailers have high overheads or cost. They have large wage bills as they often employ over 100 people both fulltime and part time in one individual shop.


Effects on suppliers, wholesalers, other retailers and consumer.

Many large scale retailers are very powerful with huge buying budgets. Often their suppliers are small producers who become reliant upon the large order place by these retailers. Large scale retailers often insist on a particular quality of products at very low prices.

How do small scale retailers survive againts competition from large scale retailers. although the share of the retail market taken by small scale retailers has fallen, many small scale retailers survive and very profitable. They have been able to adabt to the change in consumer taste and expectation or they have been lucky to serve an area that is not threaten by the opening of large retail shops. They often know preferences of regular customers. they provide quality service with a welcoming atmosphere, clean premises and clear displays. Small scale retailers often buy cash and carry warehouses. These warehouses offer self service to the retailer but provide no credit facilities and no delivery services.