Unit 1 - Introduction to Retail

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The retail industry has undergone many changes since 1980 and the number of people employed in the industry has trebled to almost 2.7 million people in that time, almost 11% of all those employed. The industry is now the second largest employer in the UK.

Out of town shopping has become a major phenomena. In 1966 the Woolworth organisation decided to build its first out of town hypermarkets, called Woolco, in the UK and stores in Oadby (three miles from Leicester), Thornaby in Teesside and on the outskirts of Bournemouth in Hampshire were opened between 1967 and 1969. By 2000 the number of superstores and hypermarkets had risen to 1,100.

This has led to a decline in a number of other parts of the retail trade. Smaller independent stores such as butchers, greengrocers, ironmongers, newsagents and others small shops have declined dramatically in that time. The traditional corner shop also declined for many years but in more recent years larger organisations such as Tesco, Sainbury's and Nisa have bought out smaller stores and reintroduced this type of convenience shop.

The introduction of the out of town shopping centres and retail parks has attracted the larger national and multinational companies and many of them have moved out of the High Street in towns. These have been replaced with charity shops, fast food and estate agents. Growing fears for the future of town centres because of increasing numbers of out-of-town superstores has led to the restriction of building of new out of town facilities owing to changes in planning controls.

Shopping hours have also changed dramatically. In the 1980s most stores operated six days a week between 9am - 5.30pm. However The Sunday trading Act 1994 led to seven-day opening for most large stores. This allowed larger stores to open for six hours on most Sundays, with the exception of Easter Sunday. The advent of the out of town superstores also led to longer opening hours with some stores opening 24-hours a day.

Retailing in the UK used to be largely conducted through British-owned stores. However overseas based companies Aldi, IKEA, Lidl and Netto have opened in UK. In addition USA-based Wal-Mart also bought Asda.

The way in which people pay for the goods they buy has also changed. Previously cash or cheques were the preferred way to pay but the introduction of debit and credit cards has changed this. Technology has even moved this on. Instead of signing to accept the payment shoppers are now encouraged to use a Personal Identification Number (PIN) to validate their payment. The number of payments made by card in 1993 was approximately 1.5 million and by 2003 this had risen to 5.3 million payments.

New technology has also led to a change in the way people buy their goods and services. In 1993, the first UK television shopping channel, QVC, was launched and in 1995 Amazon sold its first book through the Internet. However, new technology was not always a success. In 2000, the online retailer Boo.com collapsed and it was not until 2003-4 that Amazon recorded its first full year in profit.

Vending machines have become more widely used. Many schools used to have their own Tuck shops and these have been replaced by the introduction of vending machines. In 2003 Shop 24 opened in Darlington as a non-staffed store, which was essentially a very large vending machine.

Methods of stock control have also changed. In the 1980s much stock control was carried out manually by literally counting stock on the shelves. With the introduction of electronic tills, which record what exactly has been sold, stores can quickly calculate how much stock is currently being held and quickly reorder stock to replenish what has been sold.

To meet the demands of an ever more sophisticated and informed buying public stores have to be much more responsive to new products such as mobile phones, DVDs, the coffee shop phenomena.

Companies have often attempted to gain the loyalty of their customers. Many years ago the Co-op gave their customers a dividend. Customers would have their own 'divi' number which they would give to the assistant when buying goods and they would receive some money back through a 'bank' book. In the 1980s shops encouraged loyalty in their customers by giving them reward stamps, Green Shield stamps was the most successful. In recent years shops have reverted to a similar system to the Co-op and stores like Sainsbury (Reward) and Tesco (Clubcard) reward customers with money back vouchers. The Nectar Card has extended that idea by involving a number of different companies in the scheme. These loyalty cards provide companies with invaluable information on the buying patterns of their customers.

In the past few years people have become more aware of ethical issues and this has led to changes in buying habits. The Co-operative Society has taken a stand for many years on the exploitation of less well off countries and their people. Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. The Co-op has marketed a range of 'fair trade products', in particular coffee and chocolate, energy efficient light bulbs, free range eggs, organic foods and energy efficient household applications. The Body Shop has developed a number of ethical policies in support of its principles relating to human rights and social responsibility, environmental sustainability and animal protection. These principles form the basis of their campaigns and community programmes.

In recent years healthy eating has come to the forefront and has also had an effect on the retail industry. For many years products to help people reduce weight have been offered but now shops offer special products for people with diabetes and other chronic conditions. In addition, organically grown products, leaner meat cuts, reduced sugar and salt goods and reduced fat products are offered to encourage a more healthy diet. Changes to labelling, including sell buy dates and latest display dates, also help to ensure that the customer understands more about the product they are buying.

Large stores can source products from all over the world and get them into the country very quickly. This means that produce, such as tomatoes, mushrooms, salad items, apples and other fruit and vegetables, that at one time were not available because of the seasons of the year are now available all the year round. In addition, there is a much greater variety of fruits and vegetables available. For example, you can now buy items such as, Kiwi fruit, mangos, kumquats, star fruit, artichoke, broccoli and mange tout at your local store. In 1980 many of these would have only been available at specialist stores.

Introduction to Retail Services Questions

1. Why have many small, independent shops disappeared?
2. What types of shops have now come to the high street?
3. What ways have stores used to promote loyalty?
4. What recent technological advances have changed the way goods are paid for?
5. Why are ethical and organic products growing in popularity?
6. In what ways are loyalty cards useful for the retailer?
7. How have trading hours changed in the last 20 years?
8. Why did development of out of town stores slow down?
9. How has retailing in schools changed and how is the government trying to regulate what is sold in school?
10. How has shopping changed for those with special diets?

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