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Retail Store Management

Notes responsible for merchandising and the COO is responsible for operations. However, these
responsibilities and employees work at corporate headquarters.
Merchandise Division: The merchandise division is responsible for procuring the merchandise
sold in the stores and ensuring that the quality, fissionability, assortment, and pricing of
merchandise are consistent with the firm.

Figure 1.2 shows a detailed organization structure of Rich simply a more detailed view of the
merchandise categories on the left side of Figure 1.2. Each senior vice president/General
Merchandise Manager (GMM) is responsible for specific categories of merchandise. GMMs report
directly to the chairperson and CEO, the partner in charge of the merchandising activities.

Buyers: Buyers are responsible for procuring merchandise, setting prices and markdowns, and
managing inventories for specific merchandise categories. They attend trade and fashion shows
and negotiates with vendors on prices, quantities, assortments, delivery dates, and payment
terms. In addition, they might specify private-label merchandise or request modifications to
tailor the merchandise to the retailer.
Although buyers are given considerable autonomy to “run their own business,” they must
adhere to an inventory budget that will vary from season to season. The budget is the result of
a negotiation between the buyers and their superiors, divisional merchandise managers.
In recent years, the buyers’ role in supermarket chain has evolved into a category manager.
Traditional supermarket buyers were vendor focused. For example, they would just be
responsible for buying merchandise from a vendor such as Campbell or Kraft. They developed
close relationships with vendors and were more concerned with maintaining these vendor
relationships than selling products to customers. This focus was partially caused by evaluation
systems that rewarded supermarket buyers more for securing price discounts rather than sales,
gross margins, and inventory turns.

Category managers are responsible for a set of products that are viewed as substitutes by
customers. For example, a category manager might be in charge of all pastas packaged, or
canned. Category managers are evaluated on the profitability of their category and these are
motivated to eliminated buyers in most other types of retail firms have always been responsible
for merchandise categories.
Thus, the term category manager is used primarily by supermarket retailers.

Figure 1.3: Merchandise Division Organization: Richs

Source: Everonn_ Retail Management _Exhibit 6.3: Merchandise Division Organization: Richs

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