Pros and Cons of Large Scale Retailers

Large scale retailer is a big retail store that occupies a large physical area and offers a wide variety of products to its customers. They include: departmental stores, multiple shops, consumer cooperative stores, supermarkets, mail order houses and hire purchase and installment shops.

They operate on large fixed premises and are mainly found in urban areas. They buy goods from wholesalers or directly from producers hence their prices are relatively low as compared to small scale retailers.

Pros and Cons of Large Scale Retailers

Pros of Large Scale Retailers

  1. Buy goods in bulk

Large scale retailers buy goods in bulk either from wholesalers or directly from the manufacturers. This enables them to sell goods at a relatively low prices as they do not include many middlemen in the line who also have to make their own profit. As they buy goods in large quantities they enjoy discounts on the goods and hence they can also offer discounts on their goods.

  1. Advertise their good

The large scale retailers advertise their goods hence they make a lot of customers to know the goods they sell hence can easily make a lot of sales on their goods.ss

  1. Have their own warehouse

They normally have where to store goods once they have acquired them. This enables them to have stock of their goods continually as they will make orders on time and store the goods to be displayed once the other stock is over hence the constant supply of the goods.

  1. Offer employment opportunities

They employ a lot of specialists in different fields. This is because the premises are always large and need people with different skills to work in a certain field hence they are forced to employ a lot of staff which results in improving their living standards.

  1. Earns revenue

As they make a lot of sales, they earn revenue to the government and the money can be used in other areas of the economy such as transport and agriculture hence improving the economy of the country.

  1. Enjoys economies of scale

The large scale retailers enjoy economies of scale in that they make use of specialists which in turn leads to offering quality services hence attracting customers making a lot of sales from that.

Cons of Large Scale Retailers

  1. Requires large capital to start

Large scale retailers need a lot of capital to start and this may hinder many investors to start the business as they will be required to get loans from banks and other financial institutions for them to start and yet it is not easy for banks to give loans as a long procedure has to be followed.

  1. Difficulty in making decisions

It is not easy to make the decision in large scale retail shops as everyone has to be consulted and it is difficult to make the staff meet at one place and deliberate on an issue hence it may take longer for a decision to be arrived at.

  1. Needs a large staff

The shops have to employ a large staff in order to operate the business and the staff has to be paid which may an expense to the shops.

  1. Difficulty to manage

It is not easy for an individual to manage the business as it contains different areas that need professionals in order for the area to be managed well hence it is not easy.

  1. Takes time to respond to market changes

As they stock a large number of goods, it may take longer to respond to market changes because they need to finish the stock before they restock and then comply with market changes.

Summary

Large scale retail shops are good when it comes to the side of consumers as they will enjoy goods at a low price but to the owner, it is a little bit challenging as he or she needs to invest a lot in it.

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