Observation

Most candidates who attempted this question did well in part (a) but could not state the features of the retail businesses listed in part (a).  

The expected responses to the question include:

 

          (a)      Types of large scale retail businesses an investor could engage in

1. Multiple/Chain store;
2. Mail order business;
3. Supermarket;
4. Hypermarket;
5. Department store;
6. Shopping mall/Mall;
7. Franchise store;
8. Discount house.

                                                                                        
          (b)     Features of large scale retail businesses

1. Multiple/chain store

• It has identical shop design.
• It has centralised form of administration.
• It operates many outlets in different places.
• Its purchases and distribution are carried out by the headquarters.
• It transfers staff from one location to another.
• It operates uniformly in all the branches.

 

2. Mail order business

• Shopping is mainly conducted through post.
• Intensive advertisement is done through catalogue.
• Payment is based on cash on delivery (C.O.D) or cash with order (C.W.O).
• Goods are delivered to the buyers’ premises.
• It requires large warehousing facilities.
• It deals in durable goods.

 

3. Supermarket

• It makes use of baskets and trolleys.
• Prices are tagged on goods.
• It is located in residential areas.
• It deals mainly in household goods.
• It deals in wide variety/assorted goods.
• It operates a self-service system.

 

4. Hypermarket

• It is mostly located outside urban centres.
• It requires large space for shopping as well as parking.
• It offers one stop shopping.
• It employs self service system.
• It makes use of trolleys and baskets.
• It offers convenient service to customers.
• It offers lower prices to customers as a result of economies of scale.

 

5. Department store

• It is located in urban centres.
• It is made up of many shops under one roof.
• It offers self service system.
• It fixes price tags on goods.
• It displays goods well for easy selection.
• It offers one stop shopping.
• It sells on cash and carry basis.

 

6. Shopping mall/Mall

• It contains a variety of food courts.
• It provides large parking space for customers.
• It provides mixed activities to customers such as cinemas, fitness centres and bars.
• It has updated fire and smoke detectors in its buildings.
• It has fully functional power backing systems.
• It has advanced security surveillance systems in and around the mall.
• It makes use of baskets and trolleys.

 

7. Franchise store

• It has exclusive selling right for specific geographical area.
• It allows the use of brand names and trademarks.
• The franchisor provides advertising to all stores.
• The franchisee cannot deal in any other products other than those of the franchisor.

 

8. Discount house

• It offers discounts to customers in addition to lower prices.
• It stocks wide variety of goods.
• It is mostly found at the centre of towns and cities.