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Internal Trade — Business Studies STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceBusiness StudiesInternal Trade6 Marks
Question
Name and define different large scale retail shops.
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Answer

The retail trade is conducted now on a large scale. The mass production of goods and the concentration of population in urban centers has necessitated the establishment of large-scale retail trading houses. There are many advantages of retailing on a large scale. However, in spite of the economies of large scale retailing, the small-scale units could not be eliminated because of the various special advantages possessed by them.
Some of the more prominent large-scale retail organizations are as follows:
  1. Departmental Stores: A departmental store is a large-scale retail organisation having a number of departments under one roof. Each department specialises in one particular kind of trade. All these departments are centrally organized and are under one united management and control. A departmental store is an organization of several retail stores carried on in one building and under united controlled management. The basic objective of a departmental store is to provide a large variety or merchandise from a pin to an aeroplane at one place.
  2. Multiple Shops or Chain Stores: A multiple shop system is a network of branch shops, situated at different localities in the city or in different parts of the country, under a centralised management and dealing in similar lines of goods. Such multiple shops are very common and popular in the west and are known as Chain Stores. According to J.L. Fri, "Chain Stores is a group of stores handling similar lines of merchandise with single ownership and centralised location." The Federal Trade Commission defined a chain store as "an organization owing a controlling interest in two or more establishments which sell substantially similar merchandise at retail prices."
  3. Mail Order Sale Houses: A Mail Order Sale is a retail business where orders are placed by post or mail and goods are received either by registered parcel or V.P.P. Value Payable Post. Under such a type of selling, the seller advertises his products in the leading dailies and magazines of the area and the intending buyers respond to such advertisements by requesting for catalogues and price lists from the seller. The buyers do not inspect the goods before purchasing but place orders on the basis of the advertisements which they see in the newspapers and magazines. After orders are received from customers, the goods are dispatched by V.P.P. or registered mail. The postman of the buyer's locality delivers the goods to him and takes the payment for the same. Thus the post office plays a vital role in such type of sale, and it is because of this type of sale is also sometimes referred to as "Shopping by Post".
  4. Super Markets: The super market is a large-scale retail institution specializing in necessaries and convenience goods. They have huge premises and generally deal in food and non-food articles. In the words of M. M. Zimmerman, "A super market is a departmentalised retail establishment having four basic departments viz, selfservice grocery, meat produce, dairy products plus other household departments, doing a maximum business. It may be entirely owner operated or have some of the departments leased out on a concession basis." Super markets came into existence in the USA during the Great Depression of the thirties. However, the original super markets were established by independent merchants who dealt mainly in food products.
  5. Consumer Co-Operative Stores: A consumer co-operative is a retail business which is owned by the consumers themselves. Their basic objective is to eliminate middlemen. The consumers join together and manage the business and the profit thus earned is retained among themselves in the proportion of their contribution.
The society purchases in bulk and avails the discounts and sells in small lots to the members. Some of the co-operative stores are run on a large-scale basis while others are small in size and nature.
  1. Vending Machines: Such selling machines are extensively used in the west. The vending machine is operated by inserting a coin and the buyer can get the articles. Vending machines are usually acquired to sell articles like cigarettes, soft drinks, chocolates, candles etc. Railway platform and bus tickets are also sold by this method. The articles sold by a vending machine are pre-packed and labeled and are usually of reputed brands. The goods should be uniform in size and shape and less bulky in weight. The installation of such machines is an expensive affair and it needs regular maintenance also. Such machines are quite attractive in appearance and installed at busy shopping centers.

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