Structure and organisation in the retail sector.
The retail sector is at the end of the supply chain and it is where the product gets sold to the consumer, this is also known as the tertiary sector. Retailers tend to buy in large quantities from the manufactures to get lower prices which mean they can get a better profit when it is sold on. The retail sector is changing because of technology, for example most companies have gone to the ‘clicks n’ bricks’ method. This means that they are using both a store and an online website also known as e-tailing. There are some companies that only trade online as it is a cheaper way of trading as they don’t have to pay rent on a store. The online part of a business is mainly used for convenience to their customers. The online grocery market is currently worth £6.5 billion but they are predicting it to be worth £15 billion by 2018. This is an indication of how much the online sector is growing as it is becoming more convenient for the consumer. But the food and groceries sector is worth £170 billion at this point in time. This shows that even though the online sector is growing it is still not as big as the stores themselves and shows that the consumers habits of going to the store is hard to break.
The retail sector is the largest industry within the UK as it employees roughly 2.77 million people in the UK. There is an estimated of 286,000 retailers in the UK and 83% of those retailers are small organisations that employ 10 or less people, that amounts to 29% of the retail workforce and they take 19% of annual turnover in retail businesses. The retail market is dominated by a small number of large retailers who have 500+ employees. These large companies employ 66% of all people in retail and they account for 69% of annual turnover in retail businesses. In retail 58% of the employees are female and 49% of all the workers work on a part time basis. The past recession has put a struggle on many retail businesses but online retailers, major supermarkets and value/discount store have all been showing sign of growth due to convenience and lower prices available.
Types of retail stores
Department stores – these stores normally contain a wide range of products including house ware, clothes, furniture and appliances. These stores normally strive for good customer service. An example of a department store would be Debenhams. Supermarkets – these stores are a larger version of the tradition grocery stores they offer a wide range of food and household products. They offer competitive prices/discounts to be on top of their market. They tend to have 3,000 – 25,000 sq ft of sales area per store. An example of a supermarket would be Waitrose. Convenience stores – these stores tend to have a smaller range of goods at higher prices as they are smaller stores. They are normally located in residential areas and are open for longer hours. Each store has a small catchment area and they target people who don’t want to go to supermarkets as it is easier to go to them. An example of a convenience store would be One-Stop. Chain stores – a chain/multiple store must have at least 10 branches across the country and they must all have the same brand and central headquarters. Otherwise it would be a franchise. An example of this would be WHsmith. How E-tailing is used
The internet is being used more within the retail sector as it is becoming a popular source of information and nearly every family has access to the internet now. This means that they can target a wider market a lot easier, it would make it a lot easier to get market research, promote goods and services. The internet allows the retailer a better communication method, expand on target market, extend product lines and deliver personal product offers. E-tailing has become the best way to shop for most people as...
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