Types Of Retail

Institutions
‫الموسسات‬

Chapter 4
 ‫المواضيع‬

Topics
1. Types of retailers on the basis of ownership
2. Types of retailers on the basis of product line
3. Types of retailers on the basis of volume of sales
4. Types of retailers on the basis of method of operation
 Types of retailers on the basis of ownership

‫الذين‬
• The business institutions or persons who sell goods to final consumers are
‫يسمى‬ called retailers. There are different types of such retailers. For the
‫منهجية‬ ‫يكون‬ ‫منقسم‬ ‫فئات‬ ‫من هذا القبيل‬
• systematic study they can be divided in different classes, such as on the
basis of ownership, on the basis of product line, on the basis of sales
volume and on the basis of operation method.
 1. Types of retailers on the basis of ownership

On the basis of ownership, retailers are divided into four classes as follows:
i. Independent stores
ii. Chain stores
iii. Contract chain
iv. Consumer stores
 i. Independent stores

• The retailing shops operated under the ownership of a single person is

called independent stores. Because such retailing institutions are operated
under the management, ownership, direction and control of a person,
they are called independent stores.
 i. Independent stores

• An independent retailer is one who builds business from the ground up. From
the business planning stage to opening working hours. The independent retail
owner may hire consultants, staff and others to assist in the business enterprise.
• The opportunities are endless but prepare and start various kind of business
keeping in view of consumer demand in market.
• This type of retail business has a unique brand and products .
 Advantages
Advantages
Flexibility in formats, locations, and strategy
Control over investment costs, personnel functions, and strategies
Personal image
Consistency and independence
Strong entrepreneurial leadership
 Disadvantages

Disadvantages
Lack of bargaining power
Lack of economies of scale
Labor intensive operations
Over-dependence on owner
Limited long-run planning
 ii. Chain stores

Chain stores are those retailing institutions, which are operated by a

company under its ownership and management. Stores are opened
at different places and they are operated under the management and
control of company's central office.
 iii. Contract chain

Contract chain means a business institution, which is operated by private

entrepreneurs under their own management. But they perform some
business related functions such as purchase of goods of same nature,
branding , advertising etc. jointly with the retailers.
The retailers selling same nature goods enter into contract for buying goods.
Buying huge amount of goods in this method reduces price of goods and the
cost also is borne jointly due to which profit can be increased.
 iv. Consumer stores

The retailing shops operated under the ownership of consumers are called
consumer stores. The consumers in association establish such retailing shops
to get rid of the exploitation of middlemen.
Generally, consumer stores purchase goods directly from producers and sell
them to its members at cheap rate.
 Advantages
Advantages
Bargaining power
Cost efficiencies
Efficiency maintained by computerization, warehouse sharing, and
other functions
Defined management philosophy
Considerable efforts in long-run planning
 Disadvantages

Disadvantages
Limited flexibility
Higher investment costs
Complex managerial control
Limited independence among personnel
 2. Types of retailers on the basis of product line

• Retailers can be divided in three classes on the basis of product line as follows:
i. General stores
ii. Single line stores
iii. Specialty stores
 i. General stores

• General stores are such retailing shops where all kinds of goods
are found or bought and sold. In such stores all the necessary
goods for the local consumers are made available. Foodstuffs,
clothes, sports materials, household goods, medicines etc are
found in such stores.
 ii. Single line stores

Some retailers deals in only the goods of certain product

line. Such retailers achieve specialization in selling some
kinds of goods. Single line retailers involve in dealing in
goods belonging to one product line like goods of
household uses, medicines, electronic goods, motor cars,
clothes etc.
 iii. Specialty stores

The retailers who deal in only one kind of products of a certain

product line are called specialty stores or retailers
3. Types of retailers on the basis of volume of sales

Retailers can be divided in two classes on the basis of volume of sales as

follows:
i. Small-scale retailers
ii. Large-scale retailers
 Small-scale retailers

• The retailers who buy large amount of goods, keep in store

and sell them are called large-scale retailers. Such
businessmen give emphasis to division of labor and
specialization to bring effectiveness in their business.
• The financial position of such retailers remain relatively strong
and have risk bearing capacity.
Example : Baquala
 ii. Large-scale retailers

• The retailers who buy large amount of goods, keep in store

and sell them are called large-scale retailers. Such
businessmen give emphasis to division of labor and
specialization to bring effectiveness in their business.
• The financial position of such retailers remain relatively
strong and have risk bearing capacity.
 4. Types of retailers on the basis of method of operation

On the basis of method of operation, retailers can be classified as follows:

i. In-store retailing
ii. Non-store retailing
 i. In-store retailing

• The retailers who sell different goods opening their shops are called
shopkeepers or in-store retailers. Customers buy necessary goods going to
retailers' shops.
• The retailers from small-scale retailing shops to large-scale retailing shops
like departmental stores, supermarkets, multiple shops etc from which
goods are sold to final consumers, include in in-store retailing class.
 ii. Non-store retailing

• ii. Non-store retailing

•
Nowadays, retailers are found selling different goods to consumers
without establishing any shop. Similarly, the practice of selling
goods visiting door to door of customers is not a new. Other main
methods of selling goods without opening any shop are retailing through
mail and use of vending machine.
 ii. Non-store retailing

 Retailing strategy that is not store-based

 Exceeds $410 billion annually
 80% comes from direct marketing
 Web-based retailing is the fastest- growing area
 Web retailing expected to reach $ 280 annually as of 2022
 Homework
• Define Types of Retailer by ownership