Page 11 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes or job interview. American retail sales are over $3.6 Trillion for 2012, but even this sales level
underestimates the impact of retailing, because it does not include the retail sales of automobiles
and repairs.
Although the majority of retail sales take place within large retail chains, most retailers are
small businesses. Of the 1.9 million retail firms in the United States, 95 percent of them run only
one store. Less than 1 percent of U.S. retail firms have more than 100 stores.

Employment

Retailing also is one of the nation’s largest industries in terms of employment. More than 25
million people were employed in retailing—approximately 18 percent of the non-agricultural
U.S. workforce. Between 2004 and 2014, the retail industry expects to add 1.6 million jobs,
making it one of the largest sectors for job growth in the United States.

Global Retailers

Retailing is becoming a global industry, as more and more retailers pursue growth by expanding
their operations to other countries. The large retail firms are becoming increasingly international
in the geographical scope of their operations. Amway, Avon, Ace Hardware, and Inditex (Zara)
operate in more than 20 countries. The share of the global retail market accounted for by
retailers operating in more than one country also is increasing, because these global retailers
are growing at an even faster rate than are global retail sales. International operations account
for a larger proportion of sales by these large firms, as is particularly apparent in European
firms with their longer internationalization experience. Wal-Mart, Carrefour, Royal Ahold,
Metro, and Schwarz each generate more than $25 billion annually in sales from their international
operations.

1.4 Nature of Retailing and Distribution Supply Chain

The nature of retailing and distribution supply chains in various areas around the world differs.
Some critical differences among the retailing and supply chain systems in the United States,
European Union, China, and India are summarized in Figure 1.1.

Figure 1.1: Comparison of Retailing and Supply Chain Across the world

For example, the U.S. supply chain system has the greatest retail density and the greatest
concentration of large retail firms. Many U.S. retail firms are large enough to operate their own
warehouses, eliminating the need for wholesalers. And the fastest growing types of U.S. retailers
sell through large stores with more than 20,000 square feet. The combination of large stores and
large firms results in a very efficient supply chain.

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