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Retail Business Environment

Notes Popular Store Based Retail Formats

Even though stores are increasingly under treat from more recent retail format developments,
they are still responsible for the major part of the retail trade, and so the different types of stores
will be discussed before other types or retail format.

Department Stores

Department stores are the oldest form of large store. A department store is a multi-level store (at
one time six or seven stories were common, but today there tend to be two or three levels) which
is split up into clearly defined areas or departments according to product category. Any
department stores offer width and depth in the product range so that almost every shopping
need can be met, but other department stores concentrate on fewer categories and aim to offer a
great choice within those categories.

Example: Pyramid Retail, Pantaloons Retail and Shoppers Stop, they all started off as
department stores.
Variety stores are so named because they offer a large variety of goods under one roof, including
both food and non-food items. This format combines the product and brand choice of the
department store with the low price orientation of the variety store, with service level and store
environment lying somewhere in between.

Specialist Stores

Although some department stores might be considered specialist stores because of the restricted
product range (for example Harvey Nichols) or the customer market that they target (for example
Harrods), most specialist stores are smaller, in line with the size of the product range offered.
The majority of stores found in shopping centres or central retail areas are specialist stores due
to the distinguishing feature of one product area dominating the retail offer.

Specialist retailers are not restricted to the selling of products; many speciality outlets offer
service products to consumers.

Example: Fast-food outlets, cafes and restaurants, banks and building societies, repair
centres and try cleaners, hair salons, nail bars and beauty salons.

Category Killers

The term category killer, which originated in the USA, describes the large specialist retailer that
is typically found in an out-of-town or edge-of-town retail park or site. The product range is
geared to a restricted merchandise area, but the large size of store allows a very extensive
selection within that classification.

Example: Crossword, Comet, PC World, Toys R Us, IKEA, B&Q, Petsmart and Staples
are all examples of this type of retailer.
The stores are based on a one-level format and the economies of scale and inexpensive locations
allow a value driven price offer. Many of the stores offer goods that satisfy complex needs
(for example a computer or a carpet), and therefore specialist help is usually available, but the
service orientation is relatively low key allow in the opportunity to browse.

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