Reasons for Recent Growth in Firm Size
- Increased individual income: encourages retailers to grow larger to capture more profit.
- Improved transport and communication: more private cars and public transport let people travel further to shopping centres, increasing demand.
- Insurance and financial institutions: make it easier to handle large sums of money and various payment methods.
- Advertisement and pre-packaging: branding and pre-packaging reduce advertising expense and attract more customers.
- Economies of scale: large-scale retailing reduces the per-unit cost.
- Technological advancement: better storage facilities.
- Population growth and urbanisation.
Why Some Small Retailers Fail
Competition from big firms, offering too much credit to customers, failing to keep proper account books, lacking capital to expand or advertise, lacking management skill, and having no insurance coverage.
Why Small-Scale Retailers Still Survive
- Nearness to customers, saving them travel time and cost.
- Some personal services (hairdressing, tailoring) can only be supplied at small scale.
- Some goods are too risky to produce at large scale, like poultry.
- Longer or more flexible opening hours.
- Some shoppers prefer familiar shops out of habit.
- Free home delivery.
