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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