TYPES OF RETAILERS 

1. TYPES OF
RETAILERS

2. TYPES OF RETAILERS
Over time, different types of
retailers have emerged and
prospered because they have
attracted and maintained a
significant customer base.

3. FOOD RETAILERS
 Supermarkets
 Supercenters
 Warehouse Clubs
 Convenience Stores
 Box(Limited-Line) Store

4. SUPERMARKETS
 A Conventional supermarket is a self-serviced
food store offering groceries, meat, and produce
with limited sales of non food items, such as
health and beauty aids and general merchandise.
 Whereas conventional supermarkets carry about
30,000 SKUs, Limited assortment supermarkets,
also called extreme value food retailers, only
stock 1,250 SKUs.
 Rather than carrying twenty brands of laundry
detergent, limited assortment stores offer one or
two brands and sizes, one of which is a store
brand. Stores are designed to maximize efficiency
and reduce costs.

5. SUPERCENTERS
 The fastest growing retail category, are large stores
that combine a supermarket with a full-line discount
store.
 By offering board assortments of grocery and general
merchandise products under one roof, super centers
provide a one-stop shopping experience.
 Hypermarkets: are also large combination food and
general merchandise stores. Hypermarkets typically
stock fewer SKUs than supercenters - between 40,000
and 60,000 items ranging from groceries, hardware,
and sports equipment to furniture and appliance to
computers and electronics.

6. WAREHOUSE CLUBS
 Warehouse clubs are retailers that offer a limited and
irregular assortment of food and general merchandise with
little service at low prices for ultimate consumers and
small businesses.
 Warehouse clubs are large (at least 100,000-150,000
square feet) and typically located in low-rent districts.
They have simple interiors and concrete floors.
 Warehouse clubs can offer low prices because they use
low-cost locations, inexpensive store designs, and little
customer service and keep inventory holding costs low by
carrying a limited assortment of fast selling items.
 Most warehouse clubs have two types of members:
wholesale members who own small businesses and
individual members who purchase for their own use.

7. CONVENIENCE STORES
 Convenience stores provide a limited variety and
assortment of merchandise at a convenient
location in 2,000- 3,000 square foot stores with
speedy checkout.
 They are the modern version of the neighborhood
mom-and pop grocery/general store. Customers
can shop very quickly.
 Due to their small size and high sales,
convenience stores typically receive deliveries
every day.
 Convenience stores only offer limited
assortments and variety, and they charge higher
prices than supermarkets.

8. BOX(LIMITED-LINE) STORE
 The Box (Limited-Line) Store is a food based
discounter that focuses on a small selection of items,
moderate hours of operation (compared to other
supermarkets), few additional services, and limited
manufacturer brands.
 There stock usually less items, few or no
refrigerated perishables, and few sizes and brands
per item. Items are displayed in cut cases.
Customers do their own bagging.
 Box stores depend on low –priced private-label
brands. They aim to price merchandise 20 to 30
percent below supermarkets.

9. GENERAL MERCHANDISE
RETAILERS
 Department stores
 Full-line discount stores
 Specialty stores
Drug stores
Category Specialists
Home improvement centers
 Off-price retailers
 Extreme value retailers
 Factory Outlet Stores
 Hypermarkets
 Variety Store
 Flea Market

10. DEPARTMENT STORES
 Department stores are retailers that carry a broad
variety and deep assortment, offer customer
services, and organize their stores into distinctly
separate departments for displaying merchandise.
 Traditionally, department stores attracted
customers by offering a pleasing ambience,
attentive service, and a wide variety of
merchandise under one roof.
 They sold both soft goods (apparel and bedding)
and hard goods (appliances, furniture, and
consumer electronics).
 But now most department stores focus almost
exclusively on soft goods.

11. FULL-LINE DISCOUNT STORES
 Full-line discount stores are retailers that offer a
broad variety of merchandise, limited service, and
low prices.
 Discount stores offer both private and national label,
but these brands are typically less fashion oriented
than the brands in department stores.
 Target is becoming one of the most successful
retailers in terms of sales growth and profitability.
Target succeeds because its stores offer fashionable
merchandise at low prices in a pleasant shopping
environment.

12. SPECIALTY STORES
 Specialty stores concentrate on a limited number of
complementary merchandise categories and provide
a high level of service in relatively small stores.
 Specialty stores tailor their retail strategy toward a
very specific market segment by offering deep but
narrow assortments and sales associate expertise.
 Because specialty retailers focus on specific market
segments, they are vulnerable to shifts in consumer
tastes and preferences.

13. DRUGSTORES
 Drugstores are specialty stores that concentrate
on health and personal grooming merchandise.
 Drugstores, particularly the national chains, are
experiencing sustained sales growth because the
aging population requires more prescription
drugs.
 Drugstores are also being squeezed by
considerable competition from pharmacies in
discount stores and supermarkets, as well as
from prescription mail-order retailers.
 Drugstore retailers are using systems to allow
pharmacists time to provide personalized service.

14. CATEGORY SPECIALISTS
 Are big box discount stores that offer a narrow but
deep assortment of merchandise.
 These retailers are basically discount specialty
stores.
 Most category specialists use a self-service
approach, but some specialists in consumer
durables offer assistance to customers.

15. HOME IMPROVEMENT CENTERS
 One of the largest and most successful types of
category specialist is the home improvement
center.
 A home improvement center is a category
specialist offering equipment and material used
by do-it-yourselfers and contractors to make
home improvements.

16. OFF-PRICE RETAILERS
 Offer an inconsistent assortment of brand name
merchandise at low prices.
 Off-price retailers sell brand name and even
designer label merchandise at low prices through
their unique buying and merchandising
practices.
 Most merchandise is bought opportunistically
from manufacturers or other retailers with
excess inventory at the end of the season.
 Due to this pattern of opportunistic buying,
customers can’t be confident that the same type
of merchandise will be in stock each time they
visit the store.

17. EXTREME VALUE RETAILERS
 Are small, full-line discount stores that offer a
limited merchandise assortment at very low
prices.
 Extreme value retailers are one of the fastest
growing segments in retailing. Like limited
assortment food retailers, extreme value full-line
retailers reduce costs and maintain low prices by
offering a limited assortment and operating in
low-rent, urban, or rural locations.

18. FACTORY OUTLET STORES
 Outlet Stores are off-price retailers owned by
manufacturers or by department or specialty
store chains and are frequently referred to as
factory outlets.
 A factory outlet is a manufacturer–owned store
selling manufacturer closeouts, discontinued
merchandise, irregulars, cancelled orders, and
sometimes, in season, first quality merchandise.
 They closely resemble shopping centers, both in
terms of size, layout, and in carefully controlled
tenant mix, with manufacturers operating
separate units on a single co-coordinated site.

19. HYPERMARKETS
 A hypermarket is a very large retail store
offering low prices.
 It combines a discount store and superstore food
retailer in one warehouse like building.
 Hypermarkets can be up to 300,000 square feet
and stock over 50,000 different items.
 All hypermarkets are based on three concepts of:
one stop shopping, ample free parking and a
discount pricing strategy.

20. VARIETY STORE
 A variety store handles a wide assortment of
inexpensive and popularly priced goods and
services, such as stationary, gift items, women’s
accessories, health and beauty aids, light
hardware, toys, house ware and confectionery
items.
 They do not carry full product lines, may not be
departmentalized and do not deliver products.
 Transactions are often on a cash basis. There are
often displays and few salespeople.

21. FLEA MARKET
 A flea market has many retail vendors offering a
range of products at discount prices in plain
surroundings.
 It is rooted in the centuries old tradition of street
selling -shoppers touch, sample and haggle over the
prices of items.
 Price-conscious consumers who find that other retail
formats have upgraded merchandise and customer
service or raised prices frequent them.
 Many flea markets are located in nontraditional sites
not normally associated with retailing: racetracks,
stadiums and arenas.

22. NON STORE RETAILERS
 Types of retailers that
operate primarily through
non-store channels

23. ELECTRONIC RETAILERS
 Electronic Retailing (also called e-tailing, online
retailing, and Internet retailing) is a retail format in
which the retailers communicate with customers and
offer products and service for sale over the Internet.
 Internet continues to provide opportunities for
entrepreneurs in the retail industry, it is now primarily
used by traditional retailers as a tool to complement
their store and catalog offerings, grow their revenues,
and provide more value for their customers.
 Most of the retailers that sell merchandise exclusively
over the Internet target niche markets – markets that
are so small and dispersed that they cannot be
economically serviced by stores.

24. CATALOG AND DIRECT-MAIL
RETAILERS
 Catalog retailing is a non-store retail format in which
the retail offerings are communicated through a
catalog, whereas direct-mail retailers communicate
with their customers using letters and brochures.
 In 2003, $125 billion of merchandise and services
were sold through catalogs, and over 17 billion
catalogs were distributed in the United States.
 The merchandise categories with the greatest catalog
sales are apparel, gifts, books, and home décor.

25. DIRECT SELLING
 Direct selling is a retail format in which
salespeople, frequently independent
businesspeople, contact customers directly in a
convenient location, either at the customer’s
home or at work; demonstrate merchandise
benefits and/or explain a service; take an order;
and deliver the merchandise or perform the
service.
 Direct selling is a highly interactive form of
retailing in which considerable information is
conveyed to customers through face-to face
discussions with salespeople.

26. TELEVISION HOME SHOPPING
 Television home shopping is a retail format in
which customers watch a TV program that
demonstrates merchandise and then place orders
for the merchandise by telephone.
 The three forms of electronic home shopping
retailing are
 o Cable channels dedicated to television shopping
 o Infomercials
 o Direct-response advertising

27. VENDING MACHINE RETAILING
 Vending machine retailing is a non-store format
in which merchandise or services are stored in a
machine and dispensed to customers when they
deposit cash or use a credit card.
 Vending machines are placed at convenience,
high-traffic locations, such as in the workplace or
on university campuses, and primarily contain
snacks and drinks.

28. OWNERSHIP BASED
 Independent, Single-Store
Establishments
 Corporate Retail Chains
 Franchising
 Leased Department
 Consumer Co-operatives

29. INDEPENDENT, SINGLE-STORE
ESTABLISHMENTS
 Retailing is one of the few sectors in our economy
in which entrepreneurial activity is extensive.
 Many of these retail start-ups are owner
managed, which means management has direct
contact with customers and can respond quickly
to their needs.
 Small retailers are also very flexible and can
therefore react quickly to market changes and
customer needs.

30. CONT.
 To better compete against corporate chains, some
independent retailers join a wholesale-sponsored
voluntary cooperative group, which is an
organization operated by a wholesaler offering a
merchandising program to small, independent
retailers on a voluntary basis.
 In addition to buying, warehousing, and
distribution, these groups offer members services
such as advice on store design, and layout, site
selection, bookkeeping and inventory management
systems, and employee training programs.

31. CORPORATE RETAIL CHAINS
 A retail chain is a company that operates
multiple retail units under common ownership
and usually has centralized decision making
for defining and implementing its strategy.

32. FRANCHISING
 Franchising is a contractual agreement between
a franchisor and a franchisee that allows the
franchisee to operate a retail outlet using a name
and format developed and supported by the
franchisor.
 In a franchise contract, the franchisee pays a
lump sum plus a royalty on all sales for the right
to operate a store in a specific location. The
franchisee also agrees to operate the outlet in
accordance with procedures prescribed by the
franchisor.

33. LEASED DEPARTMENT
 A Leased Department is a department in a retail
store rented generally by a manufacturer. The
lessee is responsible for all aspects of business
and pays the store a rent.
 The store may impose operating restrictions for
the leased department to ensure the overall
consistency.
 The leased departments choose to operate in
categories that are generally on the fringe of the
store’s major product lines, such as in-store
beauty salons, banks, photographic studios and
food courts.

34. CONSUMER CO-OPERATIVES
 A Consumer Cooperative is a retail firm in which a
group of consumers invest in the enterprise. The
officers are elected.
 Consumer-members share the profits or savings that
accrue. Such retailers are many in number but small
in size and are most popular in food retailing.
 They are started mainly to guard against the
malpractice that many retailers indulge in and
either charge higher prices or offer inconsistent
quality of merchandise.