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vi) Automatic vending machines

These are coin or card operated machines used to sell commodities like drinks, stamps, and snacks e.t.c. Examples are coffee shops, ATM’s e.t.c

Features

They dispense goods or services once a coin or a card is inserted and instructions keyed in.

They operate without an attendant

They are usually placed at strategic places such as busy streets, office buildings, shopping centres and hospitals.

Advantages of vending machines

Commodities can be bought anytime because no attendant is required

They save the owner the cost of employing a shop attendant

They can be put strategically to boost sales e.g at institutions

They are fast and accurate

They are not affected by weather changes

They provide goods and services on cash basis protecting the owner from the burden of bad debts.

Disadvantages of vending machines

They provide a limited range of products

Break-downs or stock-outs may discourage customers

Maintenance costs are high due to regular servicing, repairs and sometimes vandalism

The owner may incur losses through fraud and use of inappropriate coins and cards by consumers.

Customers are forced to carry coins and cards in order to obtain goods or services

Their use is limited to customers who are familiar with how the machine works

They are mainly found in urban areas, thereby locking out the people in rural areas.

vii) Mobile shops

Mobile shops, like itinerant traders move from town to town or village to village selling their goods.

-They have vehicles that they have converted into a shop from which customers can buy their goods
-They visit different towns at regular intervals.

Advantages of small scale Retailers

1. Easy to raise capital to start

2. Retailers are in close contact with the consumers and may give credit to credit worthy customers.

3. Are able to use free or cheap labour from family members

4. The risks involved in their businesses are small

5. The business is simple to start and manage.

6. Few legal formalities required to start and run the business

7. The trader can easily change from one form of business to another i.e. the business is flexible

Disadvantages of small-scale retailers

1. Traders have limited access to loan facilities

2. They may not afford to hire specialists or technical staff

3. May suffer bad debts if they give credit to customers without proper assessment

4. Do not enjoy economies of scale

5. Have a low turnover because of the little capital invested

Large Scale Retailers

Large-scale retailers have the following features/characteristics;

i) Require large amounts of capital to start and maintain

ii) They operate from larger fixed premises

iii) They operate mainly in urban areas

iv)They have a large labour force

v) Buy goods in large quantities from wholesalers or directly from producers and are therefore allowed large trade and quantity discounts and other favourable credit facilities

vi)Require the services of specialists such as salespersons and accountants

vii) May occupy one large premise or several premises in the same town or in different towns

viii) They have large stocks and large sales volumes

Types of Large Scale Retailers

a) Supermarkets A supermarket is a large-scale self-selection/self-service store that deals mainly with household goods such as utensils, foodstuffs and clothes.

It has the following features;

Features of supermarkets

Requires large capital to start

They stock a wide variety of goods

Offers self service facilities

Goods have price tags or bar codes

Prices of goods are fixed

No credit facilities are offered

Sell at comparatively low prices

Goods are systematically arranged for easy selection

Shoppers are provided with baskets or trolleys for convenience

There is minimal interaction between buyer and seller

There are employees who pack goods for customers at the pay points.

Advantages of supermarkets

i) Prices may be relatively low because they buy their goods in bulk and are given discounts.

ii) Saves time as customers are able to get most goods they require under one roof.

iii) Self-service saves the customers time.

iv) Few attendants are employed thereby

reducing the monthly wage bill.

v) Impulse buying leads to more sales, hence high profits

vi) Bad debts are avoided because there are no credit sales.

vii) The price tags on goods help customers to monitor their spending.

Disadvantages of supermarkets

Do not offer credit facilities to customers

Do not deliver goods to the customer’s premises

Are found mainly in urban areas

May incur losses due to pilferage of goods

Impulse buying may lead the customers to buying goods they may not need.

They are expensive to start and operate due to the large amount of capital required

Prices are fixed and bargaining is not accepted, which discourages some customers

Minimal personal interaction limits chances for making more sales

b) Hypermarkets

A hypermarket is a large shopping complex/centre comprising a variety of businesses managed by different people all housed in one building
Examples; village market, sarit centre, Tuskeys-Kisumu, Nakumatt megacity-Kisumu e.t.c

Features/Characteristics of Hypermarkets

Are served with good access roads

They have ample parking space

Many businesses in one building

Located in the outskirts of town

Offer a variety of goods and services

Occupy a large space.

Advantages of Hypermarkets

Offer ample and secure parking space to customers

Customers can do all their shopping in one building

They are usually open for long hours

They may provide credit facilities by accepting credit cards

There is less traffic congestion as hypermarkets are located away from urban centres

Provide a wide variety of goods and services to customers under one roof.

They have fair prices that are customer friendly.

Disadvantages of Hypermarkets

Are only convenient to customers who have cars because they are situated away from city centres

They serve limited number of people due to their location

They require large amount of capital to establish

They can easily exploit their customers since their prices are not controlled

Require large amount of space which are not available in central business district (CBD)

They spend a lot of security to safeguard properties

c) Chain stores (Multiple shops)

Are large scale businesses with separate branches which are managed and organized centrally. The branch managers are accountable to the head office. Examples; African Retail Traders
(ART), White Rose dry cleaners, Nakumatt, Tuskys, Uchumi e.t.c

Characteristics/features of chain stores

Are managed centrally from a head office

Prices are standard for all their products in all their branches

All branches deal in the same type of products

Sales are decentralized i.e. the various shops situated in different places act as selling points or branches

Purchases of stock are centralized i.e. buy stock buy stock in bulk centrally and distributed to the different branches

Goods can be transferred from one shop to another where the need for them is higher

The shops operate under one name and are similar in appearance and interior layout

Features/Characteristics of Hypermarkets

Are served with good access roads

They have ample parking space

Many businesses in one building

Located in the outskirts of town

Offer a variety of goods and services

Occupy a large space.

Advantages of Hypermarkets

Offer ample and secure parking space to customers

Customers can do all their shopping in one building

They are usually open for long hours

They may provide credit facilities by accepting credit cards

There is less traffic congestion as hypermarkets are located away from urban centres

Provide a wide variety of goods and services to customers under one roof.

They have fair prices that are customer friendly.

Disadvantages of Hypermarkets

Are only convenient to customers who have cars because they are situated away from city centres

They serve limited number of people due to their location

They require large amount of capital to establish

They can easily exploit their customers since their prices are not controlled

Require large amount of space which are not available in central business district (CBD)

They spend a lot of security to safeguard properties

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