Retail Economics

By : Roohi Kanwal Shaikh Session-2 Class-BBA.1V

Before we go further lets refresh Lesson No. 1

Q1: What is the definition of retailing? Q2: What is the role of retailing in marketing mix? Q3: Write five benefits of retailing for consumer? Q4: Define these terms: Channel Power, PoS PoP, Retailers as Communication Hubs, Distribution Channel, Q5:Name the key drivers of retailing in India and Pakistan.

Before we go further, lets refresh Lesson No. 1

Q6: Name four international retailers. Q7:Name at least three famous retailers in Pakistan? Q8:What could be the possible problems for retailers in Pakistan.

Part A
Question : How retail provide various benefits to consumers?

Think of : Last time when you went shopping, what benefits you got from a retail store?

 Retailers

buy products in large quantities and then break them in to small sizes for individual consumers.

 Retailers

try to provide the different types of products available products to its consumer.

Stocking the goods until customers are willing to buy and use them.

Retailers provide goods and services at Desired time

Desired Place

Desired form
Desired Price Desired sizes

Help for manufacturers to plan their production:

Placing

orders according to demand Placing orders for product in demand

To

make changes in product design ,layout and quality according to the feed back of retailers

1.

Economic Significance of Retailing?

2.

Retail Consolidation FDI in Retail Sector in Central Asia

3.

 Retailing

affect every facet of life. Just think of how many contacts you have with retailers when you eat meals, furnish your home, have your car fixed , buy cloth for a party, job interview

Retail Sale in US 2001: US$ 3 trillion (only store sales) In 1997, 28 Lac Retail firms in US 80% retail sales are organized in US , 70% in Western Europe ,40 % in Brazil and Argentina and 35% in Korea & Taiwan 2002-03 Share in Pakistans GDP :Wholesale & retail -15.5 %

Most of big economies depends upon retail sector. By 2010 around 17% of total US work force (26 Million people) are employed in retailing and it has growing trend World total sale $6.6 trillion , Ist in the world 50 fortune 500 companies are in retail 25 of the Asian top 200 firms are retailers Wal Mart s turnover is 1/3 of India's GDP 10% of the worlds billionaires are retailers

( Repeat from Lesson 1 )

Management Opportunities To deal with highly competitive and challenging environment. Opportunities in finance, accounting, HRM, logistics, computer systems, Marketing Entrepreneurial opportunities For those who want to start their own business. Examples:Wal Mart, Giorgio Armani

Employment o Retailing is one of the largest industry in term of employment and it is estimated that this trend will grow in future. o 13.5% of Pakistans employment is in Whole sale and retail sector. Higher GDP o Organized retailing has huge potential o Transformation of Pakistans Agricultural based economy o Promotion of SMEs o Low Unemployment rate will enhance productivity of labor force

Real Estate o Better use of resources including land, labor o Create a better image of country Tourism / out bound Shopping o Helps to promote tourism , national image ,travel , hotel industry o Generate more revenue for Pakistan o Promotion of our traditional products o Examples: Kuala Lumpur, Dubai, NY, London , HK, Singapore have shopping festivals whole year around , Shopping extravaganzas

Outsourcing opportunities o Improved SCM o MIS system in place o New trend in shopping . modernization o Reduce unemployment, Improved economy o Other related Benefits Revenue for Government through taxation o Sales tax, o VAT, Custom duties

Retail Sales Rank

Compan y

Country of Origin

2010 group revenue (US $mil) 1

Walmart

Us
France UK Germon y US

$421,84 9
$121,51 9 $94,244 $89321 1 82189

2 3 4 5

carefour Tesco Metro AG Kroger

The changes which occurred over the last decade in the retail sector in urban Pakistan, in terms of a decrease in traditional kiryana stores, an increase in general stores, and the emergence of new formats such as superstores, malls, and retail chains. These trends are discussed in the context of broader socioeconomic changes, including growth in the urban middle class and disposable incomes, the recent rise in international retailing, and the possibility of global retailers such as Germany's Metro and the French Carrefour, entering the Pakistani market. The entry of such firms has often resulted in profoundly altering the retail landscape,

It is estimated that in 2002, about 6.8 million of the 50 million people living in urban Pakistan belonged to the upper and uppermiddle class, and represented a grocery market worth $1.7 billion. This segment, projected to grow to 17 million people by the year 2010, is expected to be the first to switch to modern retail stores.

The big player in the consolidating game today is Portland-based Fred Meyer Inc. Taking a major leap forward, Fred Meyer acquired Smith's Food & Drug Centers in Salt Lake City during the summer. This created a food, drug and apparel chain of 265 stores operating in 11 states throughout the Northwest, Intermountain and Southwest regions with annual 1997 sales estimated at $7 billion.

Benefits ?

Disadvantages
?