Retail Organisations

Retail Organisations: While merchants can sell their wares through a store or non store retailing format, retail organizations can also structure themselves in several different ways. The major types of retail organizations are corporate chains, voluntary chains and retailer cooperatives, consumer cooperatives, franchise organizations, and merchandising conglomerates.

(i)      Corporate Chains: Two or more outlets that have common ownership and control, centralized buying and merchandising operations, and similar lines of merchandise are considered corporate chain stores. Corporate chain stores appear to be strongest in the food, drug, shoe, variety, and women’s clothing industries. Managed chain stores have a number of advantages over independently managed stores. Because managed chains buy large volumes of products, suppliers are willing to offer cost advantages that are not usually available to other stores. These savings can be passed on to consumers in the form of lower prices and better sales.

Example: Pantaloon, Westside

(ii)     Retailers Co-operatives: These are associations independent retailers, unlike corporate chains. Wholesale sponsored voluntary chains of retailers who engage in bulk buying and collective merchandising are prevalent in many countries.

Example: Shop Rite, United Western Grocers, Amul.

(iii)    Consumer Co-operatives: Consumer cooperatives, or co-ops, are retail outlets that are owned and operated by consumers for their mutual benefit. These co-operatives are based on open consumer membership, equal voting among members, limited customer services, and shared profits among members in the form of rebates generally related to the amounts of their purchases.

(iv)    Franchise Organization: Franchise arrangements are characterized by a contractual relationship between a franchiser (a manufacturer, wholesaler, or service organization) and franchisees (independent entrepreneurs who purchase the right to own and operate any number of units in the franchise systems)

Example: Dominos Pizza, McDonalds, Subway, KFC, Café Coffee Day, ICFAI, Monginis.