GGR252H1 Lecture Notes - Lecture 12: Baby Boomers, Nuclear Family, Making Money

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16 Apr 2013
Lecture 12
Retail Supply
1.The major Factors
Retail chains/ franchisees
Shopping centre developers ( books, insurance, computer)
Government agencies
Retail Concentration
A few cities command most market and sales
A few cites have most retail chain H.Q.s
A few locations in cites command most sales
There are many retailers but relatively few of them command most of the
Most retailers are independent but most sales are in retail chains
Retail chains are numerous but a relatively small number of large chains
command most sales. Ex. walmart
The nature od retail chains advantages and disadvantage
Why do retail chains run as efficiently?
ADVANTAGES OF RETIAL CHAINS (A Independent vs. Independent Approach)
1. General advantage of scale economies
a. Most activities are cheaper at a larger scale
b. Cost per unit/outlet is low
i. More specifically below
2. Avoid Restrictions of Single/ Few Markets
a. Countries, regions, cities, trade areas what regions in the country
are we going to operate
3. Aspects of Overhead can be shared
a. E.g. administration, accounting, locational analysis, training,
4. Leverage ad purchasing power is high
a. Negotiate with suppliers and producers shelf space own brands
5. Experience: Success and Failure
a. What works? Test product lines in sub-set of stores
6. Maximum advertising/marketing exposure
a. High profile different media, generative, universal application
7. Wait-Out Strategy
a. System wide decision making retail chains will get out there and
establish in a area were houses are being built because they know that
the market is coming
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