Despite a trend toward large scale retail shops small scale retailers have survived due to the following reasons.
1. It is very easy to set up a small scale retail shop. One person with limited funds himself can start business. He need not associate other persons and no formalities are necessary.
2. A small scale retail shop can be located anywhere. It can provide goods of daily use near the place of consumers. They are not required to travel to big markets.
3. The small scale retailer knows his customers. He can attend to them personally and cater to their individual tastes and needs. Such personalised service is not available in large scale retail stores.
4. Small scale retailers cater to the masses that have limited income and can afford to buy small quantity. In India majority of the population is poor.
5. It is easy to manage and control a small sale retail shop. The owner himself is the manager. He has direct motivation to work hard and increase the efficiency of business. He takes personal interest in his business organisations
6. Small amount of capital is required to start a small retail shop. People with small amount of funds can start retail business on a small scale.
7. A small scale retailer himself looks after his business. He is not required to employ managers or to spend on advertising, etc. Therefore, he can sell goods at lower prices.
8. A small scale retailer can take quick decisions. He is not required to consult others.
9. A small scale retailer can easily adjust his stocks according to the changing needs and fashions of his customers.
10. A small scale retailer can more easily maintain secrecy of his business affairs.
Types of Retail Organisation
Retail trade is carried on both at small scale and large scale. Small scale retailers are either mobile traders (itinerants) or fixed shops. Large scale retailers always have fixed shops.
Mobile traders or Itinerants
These retailers have no fixed place of business. They move from place to place and sell articles of daily use near to consumers. These include the following:
A hawker moves about in residential localities. He carries his goods in a hand cart or bicycle. He deals in low-priced goods of daily use e.g. combs, toys, soaps, mirrors, bangles, vegetables, fruits, ice-cream, etc.
A pedlar also moves from house to house and sells articles of daily use. But he carries his wares on his head or on the back of a mule.
3. Cheap jacks:
A cheap jack hires a small shop in a residential locality for a temporary period. He shifts his business from one locality to another depending on the availability of customers. He deals in low-priced household articles.
4. Pavement dealers or Street Traders:
A pavement dealer displays his wares on footpath and outside public places such as railway station, bus stand, cinema, temple, etc. He sells low- priced articles like newspapers, magazines, fruits, vegetables, footwear to the passer by. He is also called street trader.
5. Market traders:
A market trader sells goods at weekly markets when the shops are closed for weekly holiday. He displays goods outside the closed shops. He deals in low-priced articles of daily use. He may also set up stalls on fairs and exhibitions.
Fixed Shops (Small Scale Retail Shops)
Small scale retail shops are the most popular form of retail trade. These may be classified as follows:
1. Street stalls holders:
These stalls are located in the main streets or street crossings. A stall is an improvised structure made of tin or wood. The street stall holder displays his goods on a temporary platform and sells toys, stationery, hosiery items, etc. at low prices.
2. Second hand goods shops:
These shops sell used or second hand articles such as books, clothes, furniture, etc. They cater to the needs of poor people who cannot afford new articles. These shops collect goods at private and public auctions.
3. General stores:
These stores sell a wide variety of products under one roof. For example, a provision store deals in grocery, bread, butter, toothpaste, razor blades, bathing soap, are washing powder, soft drinks, confectionery, cosmetics, etc.
Consumers can buy most of their daily requirements at one place. Their time and effort is saved. Some of these stores offer free home delivery and monthly credit facilities to regular customers.
4. Single line stores:
These stores deal in one line of goods. They keep stock of different size, design and quality of goods in the same line. Book stores, chemist shops, electrical stores, shoe stores, cloth stores, jewellery shops, etc., are examples of single line stores.
5. Speciality shops:
These shops generally specialise in one type of product rather than dealing in a line of products. Shops selling children’s garments, educational books, etc., are examples of such shops.
Large Sale Retail Organisations
Large scale retailing is becoming popular due to urbanisation and other reasons. Departmental stores, multiple shops, mail order business houses, super markets, consumer cooperative stores, etc., are examples of large scale retail organisations.
“A departmental store is that type of retail institution which handles a wide variety of merchandise under one roof with the merchandise grouped into well defined departments which are centrally controlled.”
“A departmental store is a large retail establishment having in the same building a number of departments each of which confines its activities to one particular branch of trade and forms a complete unit in itself.”
“A departmental store carries several product lines, typically clothing, home furnishings, and household goods, where each line is operated as a separate department managed by specialist buyers or merchandisers.”