Types of Retail

A) Supermarket - “1930’s saw the emergence of supermarkets-

emergence of discount stores. The first hypermarket that was
developed, was Carrefour in France, in 1963. It gave consumer
a choice and picking up by making comparison.”

Advantages:

1. “Saving in labor cost due to self-service system.”

2. “Reasonable or low prices of goods.”

3. “Freedom of selection.”

4. “Advantage of large scale of operations.”

5. “Shopping is quick and easy.”

Disadvantages:

1. “Lack of personal attention.”

2. “Require huge financial resources.”
3. “Requires large and expensive premises.”

B) Convenience Store (500-1500sq.ft)

a) “Small residential retailers or retail chains consisting of
small neighborhood stores.”
b) “Open long hours.”
c) “Carry limited lines of higher-turnover necessities.”
d) “One-stop shopping.”
e) “Open in conjunction with Gas stations.”
f) “Ease of shopping, routine rapport”

Example - Bharati Retail (Easy Day), Tesco (Fresh and Easy), Om Daily Needs (Pratidin), Food world
express – mini marts, Reliance fresh

Advantages:

1. “They are a natural destination retail location.”

2. “It provides an economic boost to the community.”

3. “It doesn’t cost much to start a convenience store.”

4. “Convenience stores are not bound by local pricing needs.”

5. “Franchises are often available.”

Disadvantages:

1. “Long operational hours are often required.”

2. “Cleaning and maintenance are frequent requirements.”

3. “Convenience stores experience inventory losses.”

4. “These stores sell what people want more than what they need.”

5. “Franchising with a convenience store involves long-term fees.”

C) Department Store (500-40,000sq.ft.) - It is a one stop
shop with several product lines – (Largely non-food)
Typically clothing, home furnishing, and household
goods - with each line operated as a separate
department managed by specialist merchandisers.

Example - Marks and Spencer’s, Lifestyle, Globus,

Shopper’s Stop, Pantaloons, Westside, Pyramid,
Ebony.

Advantages:

1. Shopping convenience
2. Wide choice.
3. Economies of large scale.
4. Central location.

Disadvantages:

1. Distance.
2. High Prices.
3. High operation cost.
4. High capital is required to establish a departmental store.

D) Hypermarkets - Range between 80,000 and 220,000 square

feet and combine supermarket, discount, and warehouse
retailing. Full line of groceries and general Merchandise are
available.
Product assortment includes furniture, large and small
appliances, clothing, and many other items with discounts.
Hypermarkets were originated in France.
Example - Spencer’s Hyper, Reliance Mart, Big Bazaar

Advantages:
To retailers
1. Economies of scale
2. Increased sales due to wide range of products
To consumers
1. Great shopping experience
2. Great quality wide variety

Disadvantages:
To retailers
1. Increased cost of accommodating the wide variety of products
2. High startup costs
 To consumers
1. “Transportation problem (they are situated in the outskirts).”
2. “Customized service not provided”

E) Factory Outlets - “Merchandise bought at less than

regular wholesale prices and sold at less than retail.
They focus on mass selling and reaching economies of
scale or selling the stock left after the season is over.
Typically, these are Franchise outlets located away
from the main markets”
Example - Factory Outlets – Levis, Reebok, Wrangler,
Brand factory

Advantages:

1. Discounted price.”
“

2. Factory outlets benefit customers as they get branded goods at affordable prices.”
“

3. “It helps companies get incremental revenue from goods which are out of fashion or slightly

defective.”
4. “Factory outlet centers help companies save warehouse space as displaying at outlets leads to
sale.”

Disadvantages:

1. There are considerable chances that the products bought from factory outlet centers may get
“

torn off or become unusable in a very short duration which in turn upset the customer and he
might not turn up to this company or brand next time ever thus reducing the customer lifetime
value.”
2. “Buyers turn up to factory outlets to have huge discounts and thus, to save money which many
times do not turn up so in reality. They end up buying a good amount for a product which was
supposed to last for years but may end up lasting just a few weeks which in fact costs the buyer
even more.”
3. “One factor that distinguishes a regular company from a brand is the brand equity or the brand
value. Selling a lower quality product through factory outlets lowers the brand value of the
company.”