Successful retail operations depend largely on two main dimensions: margin and turnover. How far a retail enterprise can reach in margin and turnover depends essentially on the type of business (product lines) and the style and scale of the operations. In addition the turnover ,also depends upon the professional competence of the enterprise. In a given business two retail companies may choose two different margin levels, and yet both may be successful, provided the strategy and style of management are appropriate. Margin Turnover Model Ronald R. Gist “Suggested a conceptual frame work, using margin and turnover, for understanding the retail structure and evolving a retail strategy.” Margin is defined as the percentage mark tip at which the inventory in the store is sold and turnover is the number of times the average inventory is sold in a year. Margin Turnover Model is a diagrammatic representation of the frame work and Continue reading
Retail Management
Increase in Power of Organised Retail
The bargaining power of organized retail translates directly into higher gross margins for the retailers. At present there are a large number of independent retailers with little bargaining power vis-Ã -vis manufacturers, distributors and wholesalers. The manufacturers have been promoting their brands and generating consumer demand for branded products. This makes it necessary for all varieties of stores especially in urban areas to stock branded products. The manufacturers take advantage of the consumer pull to limit margins to the retailers. The retailers manage their profitability by operating on a very low cost basis. This is possible because of low rental expenses due to historical reasons and low labor costs due to employment of family members in the store. The modern stores have somewhat higher gross margins, but their net margins are not very significant for providing the cash flow required to fuel rapid growth in outlets. The retailers can increase their Continue reading