LARGE SCALE RETAIL TRADE —MEANING, FEATURES, ADVANTAGES AND DISADVANTAGES

Large-scale retail trade is a type of retail trade which involves selling a single type of goods or a variety of goods to a large number of consumers in a big shop.

It is a form of retail trade where products are offered for sale either under one large roof or in separate locations to make shopping more convenient.

A large-scale retail trade may also provide free delivery services to consumers.

Examples of large-scale retail trade include supermarkets, department stores, hypermarkets, and chain stores.

Features of a large-scale retail trade

1. Offers a wide range of products: A large-scale retail trade typically offers a wide range of products, including food, drinks, and other necessities of life.

2. Operate on a large-scale basis: Because large-scale retail trade entails offering items to numerous consumers, the scope of operation is quite high.

Most large retail trade shops are comparatively larger than small trade shops.

3. Require large capital to set up: Because large-scale retail trade is typically conducted on a large-scale basis, it typically requires a sizable initial investment.

Most large-scale retailers invest heavily in fixed assets such as buildings, and equipment.

The cost of operating and maintaining the business is also very substantial.

4. Located near busy places: The shops of most large-scale retailers are usually near places where a large number of people gather or important places in the city.

5. Purchase goods in bulk: Supermarkets and other large-scale retailers typically buy products in bulk from manufacturers.

By buying goods in bulk, large-scale retailers enjoy the benefits of economies of scale.

6. Form of organization: As a result of their scale of operation, most large-scale retail traders are usually organized as public limited companies or private limited companies to be able to raise enough funds for their operations.

7. Non-personalized service: Large-scale retail businesses typically sell to a lot of people, therefore they are unable to get to know each consumer well enough to offer him personalized services.

Advantages of Large scale retail trade

1. They enjoy economies of scale as a result of bulk purchase.

2. Large scale retailers provide customers with variety.

3. They generally sell at a lower price to customers.

4. Large scale retailers face Low competition because of high capital requirement.

5. They provide goods shop experience to customers by making payment easy and by providing extra services to customer.

Disadvantages of large scale retail trade

1. High capital requirement discourages prospective retailers.

2. A large number of large scale retailers are not conveniently located closed to the customers.

3. Large scale retailers faced the risk of shop lifting since they offer self-service to customers.

4. High risk arising from high fixed cost and possibility of stock damage.

5. They faced management problems arising from large scale operations.

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