(a) Explain five advantages of large scale retailing (b) State five characteristics of each of the following: (i) Department Stores (ii) Supermarkets.

Answer Details

(a) Five advantages of large scale retailing

1. Economies of scale / bulk buying: Large retailers buy in huge quantities directly from manufacturers, earning trade discounts and lower unit costs which can be passed on as lower prices.
2. Wide variety of goods: They stock a very large range of products under one roof, giving customers wide choice and the convenience of one-stop shopping.
3. Better facilities and services: They can afford facilities such as air-conditioning, car parks, escalators, delivery services and credit facilities that attract customers.
4. Specialisation and division of labour: With many employees, staff can specialise in buying, selling, accounting and display, raising efficiency.
5. Large-scale advertising and promotion: Their size allows heavy advertising and sales-promotion campaigns whose cost is spread over a large turnover.

(Other points: ability to employ experts; ready access to bank finance; ability to withstand periods of low sales.)

(b) Five characteristics each

(i) Department Stores

1. A very large single store divided into separate departments, each selling a particular class of goods.
2. Each department is managed almost like a separate unit under a departmental head, but all are under one overall management and ownership.
3. They provide many customer services such as restaurants, restrooms, delivery and after-sales service.
4. They stock a wide range of goods, mainly shopping and speciality goods, under one roof.
5. They are usually sited in city centres and require large capital and floor space; goods are often sold at fixed prices.

(ii) Supermarkets

1. They operate on a self-service basis; customers pick goods from open shelves using baskets or trolleys.
2. They deal mainly in fast-moving, everyday household goods such as foodstuffs, provisions and toiletries.
3. Goods are pre-packed, clearly priced and displayed on open shelves for easy selection.
4. Payment is made once at centralised checkout / cash points near the exit.
5. They rely on low prices, quick turnover and minimal sales staff to keep costs down.