Department stores Apparel Consumer Electronics Drug and Discount

Department stores Apparel Consumer Electronics Drug and Discount Home Improvement Home Shopping Specialty Retailers Sears J C Penney Limited TJX Circuit City Best Buy Wal-Mart Kmart Home Depot Lowe’s Service Merchandise Fingerhut Costco Toys R Us 41. 322 30. 678 9. 347 7. 949 8. 871 8. 358 139. 208 33. 674 30. 219 12. 245 3. 327 1. 912 24. 270 11. 200

. 9 3. 8 9. 6 24. 5 4. 9 5. 7 5. 9 6. 2 16. 7 9. 2 Sales ($billions) 12. 9

METHOD OF CLASSIFICATION DESCRIPTION OF RETAIL OUTLET Form of ownership Independent retailer Corporate chain Contractual system • Retailer-sponsored cooperative • Wholesaler-sponsored voluntary chain Franchise Level of service Self-service Limited service Full-service Merchandise line Depth • Single line • Limited line Breadth • General merchandise • Scrambled merchandise

FRANCHISE TYPE OF BUSINESS TOTAL START -UP COSTS Mc. Donald’s Fast-food restaurant $385, 000 -$520, 000 Merry Maids Cleaning Service $27, 500 -$40, 500 Jiffy Lube Automobile fluid service $208, 000 -$229, 000 Mail Boxes Etc. Postal Services Duds ’N Suds Laundry and snack bar $60, 000 Radio Shack Electronic accessories $67, 500 Barbizon School of Modeling $69, 500 -$124, 000 $55, 000 -$75, 000 NUMBER OF FRANCHISES 19, 500 700 667 2, 953 80 1, 934 65

Breadth: Number of different product lines Shoes Appliances CDs Men’s Clothing

DISCOUNT STORE SUPERCENTER HYPERMARKET Average size (in square feet) 70, 000 230, 000 Number of employees 200 -300 400 -600 Annual Sales ($ millions per store) $10 -$20 $75 -$100 Gross margin 18%-19% 7%-8% Number of items stocked 60, 000 -80, 000 60, 000 -70, 000

Kmart Just for Feet Bloomingdale’s Tiffany

High Value-added/ Broad Line (Bloomingdales) Low Value-added/ broad line (Kmart) High Value-added/ narrow line (Tiffany) Low Value-added narrow line (Just for Feet)

As more time passes, outlet adds still more services As time passes, outlet adds services Passage of time

Early growth Accelerated development Maturity Profit Decline General store Catalog Retailers Malls (? ) Department stores Supermarkets Fast food outlets Convenience stores Warehouse clubs Factory outlet stores Single-price stores Single-brand stores On-line retailers Value-retail stores Market share