Large Scale Retailing | Advantages and Disadvantages

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Hello, welcome to this blog on Large Scale Retailing Trade in commerce.

Table Of Contents

  1. Meaning Of Large Scale Retailing
  2. Advantages of large scale retailing
  3. Disadvantages of large scale retailing
  4. Revision Questions

LARGE SCALE RETAILING

Meaning: Large scale retail trade refers to the purchase of bulk and sales of goods and services by businesses or organizations on massive scale.

Large-scale retailers achieve their growth by increasing the physical size of their units to carter for more customers. Large-scale retailing could exist as:

Types Of Large Scale Retailing Trade

  1. Chain or multiple stores
  2. Departmental stores
  3. Supermarkets
  4. Hypermarket
  5. Retail cooperative society
  6. Mail order
  7. Discount houses
  8. Franchising
  9. Variety stores
  10. E-commerce platforms e.g Amazon, Alibaba.

Advantages of Large Scale Retail Trade

  1. Economics of scale: Large scale retail trades ensures economics of scale because of their large sizes.
  2. Bulk purchase: They can buy goods in bulk and sell in bits or units.
  3. Extensive advertising: Large scale retail trade can afford to carry out more extensive advertising to increase sales.
  4. Operates on Cash and Carry basis: Their size ensures that they sell only on Cash and Carry basis which ensures no bad debt.
  5. Risk is widely spread: The risk of the business is widely spread, loss in one branch is covered by other branches.
  6. Employment of expert: Large scale retail trade usually employ competent or specialist staff to run their operations.
  7. Access to larger capital: They have access to larger capital, to improve operations which may increase profit.
  8. Stock variety of goods: Their size makes One stop shopping possible, in other words they have the ability to stock variety of goods.
  9. Provision of after sales services: Large scale retail trade provides after sales services, which are beneficial to consumers.
  10. Facilitates e-commerce: Large scale retail trade facilitates electronic buying and selling (i.e, e-commerce).
  11. Requires few sales attendants: Only few sales attendants are needed because of self service.

Disadvantages of Large Scale Retail Trade

  1. High cost of operation: Extra running cost will be incurred in the operation of the business, e.g, Extra cost of baskets, trolleys, etc.
  2. No credit facilities: Customers are not allowed to have credit facilities in this type of retail business.
  3. Less personal attention: The nature of the large scale retail trade which allow self-service and price tags leads to less personal attention given to customers.
  4. High rate of pilfery: As a result of self service, goods in this type of business are prone to high level of pilfery by customers.
  5. Restricted only to urban centers: Large scale is restricted only to urban centers thereby denying the rural dwellers goods at cheaper prices.
  6. Inability to bargain: Most goods in large scale railing trade carry price tags and this makes it impossible to bargain or price the cost of these goods.

Revision Questions

  1. What do you understand by large scale Retailing?
  2. List four types of large scale retail trades.
  3. State five advantages of large scale retailing.
  4. State four Disadvantages of Large scale retail trade.

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