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Unit 8: Merchandise in Retailing

 Supercentres, merchandise/groceries Walmart’s projected high growth area of 1990s. Notes
Getting away from Hypermarkets. 80% of shoppers shop both sides of store. Use groceries
to attract customers (traffic generaters), hoping they purchase high margin items.
 Discount Stores-Walmart, Kmart Developed in the 1950s when the post war supply for
goods caught up with the demand for goods. Departmentalized, volume retailers.

 Off-price retailers-Buy manufacturers seconds, overruns, off seasons at a deep discount. TJ
Maxx, Marshalls (317 stores, largest in the US).
 Discounted prices, fewer customer services. Inventory turned over 9- 12* per year
(specialty retailer *3).
 Outlet malls-Reading VF outlet.
 Manufacturers that use Off-price retailing may alienate specialty retailers.

 Cannot advertise specific brands, but are advertising existence.
 Factory Outlets Dollar Discounts
Offering more and more first run items, it is difficult for manufacturers to make enough
“seconds” to fill these stores. Also starting to offer services, i.e. taking credit cards etc. It is
not always the case anymore that you are guaranteed to get a better deal here than at a
Department Store that has items on sale...especially if you consider the costs of accessing
remote locations, etc.

 Warehouse/Wholesale Club... Members’ only selling operations combine cash & carry
wholesaling with discount retailing. Pioneered by Price Club, now bought out by Cost
Co. Wholesale Club. Largest, Walmart’s Sam’s Club, $6.6 bn. KMart’s PACE

 Variety Stores... Woolworths are transforming to specialty merchants, Champs Sporting
Goods, Kids Mart, Lady Footlocker, and Woolworth Express. Variety stores are becoming
less popular.

Did u know? The present value of the Indian retail market is estimated by the India Retail
Report to be around ` 12,00,000 crores ($270 billion) and the annual growth rate is 5.7
percent.

Task Collect information on the different types of merchandising stores in your state and
classify them based on the information given above.

Self Assessment

State whether the following statements are true or false:
3. Specialty retailers foot locker and radio shack are departmental stores.

4. Competition from discount stores and specialty stores has put pressure on department
stores.

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