Page 16 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 1: Introduction to Retail Environment

Notes

Caselet Toys R Us

oys “R” Us, is a toy store chain based in the United States. The chain also has
locations in Europe, Asia, Oceania, Africa, and Canada. The company currently
Toperates 840 stores in the United States and 716 stores in 34 other countries, with
some of them under franchises or licenses. The flagship store in New York City’s Times
Square is the largest toy store in the world. It is the largest toy-centered retailer and the
second largest overall toy retailer in the United States. Toys R Us can be termed as a
Category killer. Category killer is a term used in marketing and strategic management to
describe a product, service, brand, or company that has such a distinct sustainable
competitive advantage that competing firms find it almost impossible to operate profitably
in that industry. The existence of a category killer eliminates almost all market entities,
whether real or virtual. Many existing firms leave the industry, thereby increasing the
industry’s concentration ratio. Toys R Us can be termed as a category killer because it is
focused on one or few categories of merchandise and offers a wide selection of merchandise
in these categories at relatively low prices.

Convenience Stores (C-stores)

As yet, no official definition of a convenience store has been established although the following
criteria generally apply to this format: self service, 1,000-3,000 sq ft selling area, parking facilities,
open 7 days a week for long hours, a wide range of goods, but limited brand choice, including
groceries, CTN (Confectionary, Tobacco and Newspaper) products, toiletries, OTC (Over-the-
counter) medicines, alcohol and stationery. Other products and services that might be offered
are take-away foods, toys, video hire, film processing and petrol (Nielsen, 2001).

Supermarkets, Superstores and Hypermarkets

Supermarkets, superstores and hypermarkets can be considered in the same ‘family’ of retail
format, in that the stores are self-service, usually on one level and laid out in a functional grid
pattern of aisles and shelving. Supermarkets are the smaller variant, usually located in a town
centre or neighbourhood location, with a product range that concentrates on food and household
consumables.

!

Caution Superstores are 25,000 square feet (approximately 8,000 square meters) or more,
are usually in an edge or out-of-town location, and they have an extended product range
featuring product categories such as clothing, home furnishing and home entertainment
goods (for example ASDA and Casino). A hypermarket is a huge retail outlet (over 50,000
square feet) in an out-of-town location, which offers an extensive range of products with
the proportion of non-food items being greater than a superstore (a hypermarket is typically
60 per cent non-food).

Example: Carrefour sells car tyres and bicycles in their hypermarkets in France and
Spain.
They all provide faster product purchasing as customers are required to do self service.

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