Factors for the Growth of Large-Scale Retailing in Developed Countries

The development of large-scale retailing in the western countries is very recent. After the war II there was tremendous development in large-scale retailing, especially in U. S. A. and some advanced European countries. There are some reasons for the growth of large retailing in those countries. If we analyse these causes, it will be obvious to us why large-, scale retail stores have not developed in underdeveloped countries.

Factors for the Growth of Large-Scale Retailing

(1) Improved transportation System : Efficient transport and communication facilities are vital to the growth of large-scale retail stores. Improved and cheap transport facilities enable the people to come to the stores from distant areas. Transport hazards discourage the consumers to go a long way to purchase their necessities.

The large retail stores are generally situated in a central place of the town which may be far away from the residential areas. So if easy transport facilities are available, large-scale stores can expect patronage from large number of people. Improved transportation has enabled customers to travel to central stores with greater convenience.

(2) Improved Communications : Rapid development in communication has made it possible for large stores to use advertising media covering larger geographic areas, and the advertising has stimulated consumer demand.

(3) Higher Income of People : The merchandise sold by the large stores are generally costlier and higher than the small stores because they are to pay higher establishment, rental and decoration charges, salesmen’s salaries are also higher. So higher income group can only afford to purchase goods from the large stores. In the advanced countries, the standard of living is high and hence the people haunt to the large stores.

(4) Large Capital : Large retail stores require a large amount of capital. In the advanced countries, the big or medium industries have been already developed and so people with some money do not go to float big business, rather they employ it in large stores. But in   our country small retailers cannot provide the larger amount required by large scale stores and the high-income group generally invests its money in the industrial sector which has not been so much developed.

(5) Higher living standards : As living standards have been raised, people have wanted a great variety of goods. Large-scale stores have prospered because they could meet this demand.

(6) Increased concentration of the population : As people have moved from rural to urban or suburban areas they have provided a new market for large stores.

(7) Discount of manufacturer to large purchaser : In the advanced countries the big manufacturers allow discount to the large purchaser. In our country large manufacturers are few and they can not allow substantial discount to the large retail stores.

(8) Mass production : The manufacture of consumer goods on a mass scale has stimulated mass distribution.

The above factors are mainly responsible for the growth and development of large-scale retail stores in western countries. But unfortunately all of them are absent in Bangladesh. The transport system is not developed, only a very few people own cars in contrast to advanced countries, the in come of the people is very low, and there is lack of capital for investment in retail stores.

There are also some other factors, though not significant but to some extent important, that affect the growth of large-scale retail stores in our country.

(1) Buying habits: Most people do not like to buy goods from large stores. They move from store to store, seeing and examining, to kill time. Many have no alterative means to spend time and hence they want to pass the time in marketing commodities of his necessity.

(2) Observation of formality : In large-stores some formalities such as, taking desired article from the shelves, and then going to the salesman who would give a receipt and then approaching the cashier to make payment and showing the cash memo in the gate when coming out of the store, are to be observed. Many consumers do not like to follow this formality.

(3) High prices: In comparison with small stores generally high prices are charged by the departmental stores.

(4) General apathy : The poor people think the large store is the place for the well-to-do persons and they do not like to go to shop there.

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