A retail competition theory that says that, like the things they sell, retailing institutions go through a

predictable cycle. Although it is an unpredictable evolutionary process, it gives retailers and

suppliers with possibilities to maintain earnings.

The product life cycle idea, as articulated by Philip Kotler12, can be applied to retail businesses as
well. This is the case because retail enterprises move through discrete stages of invention,
development, maturity, and decline. It's commonly referred to as the retail life cycle.

The characteristics and strategies of an institution change throughout time. The 'Retail Life Cycle' is a
theory that describes how retail establishments evolve over time. It is assumed that retail
establishments evolve in an's' shape throughout their economic existence. The following are the
four primary phases of the s-shaped development curve:

1. Innovation

2. Accelerated Growth

3. Maturity

4. Decline

Innovation

A new firm is established; it improves the convenience of its customers or offers them extra benefits
not available from existing retailers. This is the stage of the invention process when the company
only has a few competitors.

Because it is a novel concept, the rate of expansion is rather fast, and management fine-tunes its
strategy through experimentation. Profitability is moderate, and this stage might extend up to five
years depending on the organisation.
Accelerated Growth
The retail industry is experiencing rapid rise in sales. A few competitors emerge when the company
moves to the second stage of growth, development.

Because the company has been in the market for a while, it can now anticipate market trends by
gaining a leadership position. Because growth is so important, both the investment level and
profitability are high. The majority of the funds are allocated to systems and procedures. This period
could extend anywhere from five to eight years. Cost pressures, on the other hand, are more likely
to appear near the end of this period.

Maturity

Although the corporation continues to expand, new types of retailing are putting a pressure on its
ability to compete. As a result, growth tends to be more gradual. The rate of growth slows and
earnings begin to drop as markets become more competitive and direct competition gets more
fierce.

Now is the time for retailers to rethink their strategies and reposition themselves in the
marketplace. It's possible that not just the format, but also the commodities mix displayed, will vary.

Decline

The retail industry loses its competitive advantage and experiences a downturn. The organisation
must now decide whether or not to remain in the market. Growth is slowing, profitability is
dwindling, and operating costs are rising.

Organized, corporate engagement in the retail sector is a relatively new phenomenon in India. The
majority of retail enterprises in India have always been small, family-run operations. As a result,
putting a retail company on the market that has gone through all four stages of the retail life cycle
can be difficult.

It's crucial to realise that a successful retailer doesn't have to go from maturity to decline. By
rethinking the marketing approach or changing the product or service offering, a store may be able
to return to the growth phase after reaching maturity with a specific format and mix of products.