Page 107 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes
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Caution The local and state legal and regulatory environment can have a significant
effect on operating stores costs for retailers.

6.7 Legal Considerations in Retailing

Retailers have realized the advantages of reflecting an ethical sense in business operations. The
organizational environment plays a major role in the kind of ethical sense the employees
possess. Retailers are trying to ensure that their employees behave ethically. Though there are
many laws influencing the business environment of the retailer, there are many more aspects
that come under the purview of ethics. These aspects concern the merchandise buying and
selling practices in the firm. Retailers also need to be socially responsible and environmentally
concerned. They often undertake activities that are beneficial to the society. Retailers are also
taking measures for waste reduction, trying to recycle the materials used and are switching over
to environment friendly packaging materials.
Legislation governs the retail firm’s operations and relations with its channel partners. Its
relations with suppliers, competitors, consumers and employees are governed by appropriate
laws. Legal restrictions are imposed on practices concerning pricing, product, promotion,
distribution, trademarks and HR policies.
Self Assessment

Fill in the blanks:
6. ................... formulas can be used to determine a companies stability, long term growth,
and investment potential.

7. ................... and other attached, adjoining retail locations will also have guidelines or rules
for how they prefer their tenants to do business.
8. The ................... or office building may be another option for a retailer, especially when
they cater to other businesses.
9. ................... is making a dramatic impact on the retail industry as a whole.
10. ................... have realized the advantages of reflecting an ethical sense in business operations.

11. The ................... plays a major role in the kind of ethical sense the employees possess.

6.8 Location Considerations for Retail Business

One of the most dangerous times in the life of a small retail business is when the owner must
relocate because the business is growing and the existing facility is no longer adequate. This is
a nice problem to have, but choosing the wrong new location can kill the growing business.
Retail locations must have high visibility and easy accessibility to succeed. There are many
criteria to consider when choosing a new location. Too often, business owners make assumptions
about the new location without taking time to do the necessary research to evaluate the decision.
The following discussion includes some of the most important location considerations for a
retail business.

Choose a High Density Area: This seems obvious, but many times business owners assume a
location is right and that there are plenty of potential customers without actually looking at the
numbers. Take time to research the area and find out the actual population of the area and the
make-up of the population.

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