Classification of Different Retail Outlets

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Retail establishments commonly known as stores are the places where retailing or processes of selling goods to the ultimate customers are performed. These establishments are open to the general public and sales are made in small quantities.

There are different types of retail establishments. Some of these have characteristics that differ from one another, although they have similarities in common. Because of varied nature of these retail stores, it is difficult to determine their methods of operation or to evaluate their efficiency unless they are categorized into classes or types based upon certain factor.

Here are different retail outlets which are classified according to the following:

1. Forms of Ownership

a. Independent stores – these are individually owned and managed business units.

b. Franchise – this refers to contractual agreement between a franchiser (manufacturer or wholesaler) and an independent retailer (franchisee). The franchiser grants the right to a retailer to sell certain goods or services and usually provides the equipment, products, and managerial services.

2.Level of Service or Functions Performed

a. Cash and Carry Stores – in this type of store, goods are sold strictly on cash basis.

b. Supermarkets – these are large-scale departmentalized retail institution specializing in groceries in wide assortments on a self-service basis.

c. C.O.D. – the customer pays for the merchandise upon delivery of this to his/ her home.

d. Credit Sale – the customer buys merchandise on credit and is given a specific period of time within which to pay for his/her purchase.

3.Mode of Operation

a. Direct selling – this means selling direct from the producer to the ultimate user.

b. Mail-order firms – these retail firms use mail order catalogs to inform customers of their offering. Purchases are also delivered by mail or by trucks.
c. Automated vending machines – this type of retailing makes use of coin-operated machines which automatically sell merchandise without the services of a salesclerk.

4. Merchandise Line

a. General Stores – these are retail stores which sell different kinds of unrelated commodities including groceries, dry goods, house ware, school supplies, hardware and even over-the-counter drugs.

b.Specialty stores – these are one line stores which offer a unique product assortment, knowledgeable salesclerk and good service.

c. Convenience stores – these are multiple-line type of stores which carry an assortment of “pick-up” items such as groceries, cosmetics, and school supplies.


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