ZIMSEC O Level Commerce Notes: Retail Trade: Advantages and disadvantages of large-scale retailing

Advantages of large-scale retailing

The retailers have large amounts of capital which allows them to:

  • buy goods in bulk on cash at low prices
  • advertise the goods
  • operate own transport
  • build own warehouse
  • employ specialists
  • can sell goods at low prices
  • can offer credit facilities
  • enjoy economies of scale
  • can pre-pack goods

Disadvantages of large-scale retailing

  • difficult to manage
  • loss of personal touch with customers
  • requires large capital to establish
  • take long to respond to market changes
  • May fail to make decisions quickly
  • have large overhead expenses and running costs
  • suffer from diseconomies of scale

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