Retail Basics and Retail Formats
This section covers Retail Basics and Retail Formats. The exam tests whether you can define retailing, distinguish it from wholesale, and classify stores by merchandise, ownership, service level and channel.
Core ideas
Retail is the sale of goods or services to the final consumer for personal or household use. A retailer breaks bulk, sorts and grades goods, displays assortments, provides credit or home delivery, and gives after-sales support. Wholesale sells in larger quantities to traders or institutional buyers, not mainly to final consumers.
Common formats include kirana or convenience stores, specialty stores, supermarkets, departmental stores, hypermarkets, malls, chain stores, franchise outlets, cooperatives, vending machines, direct selling and e-commerce. Classify a format by ownership (independent, chain, franchise, cooperative), merchandise breadth and depth, service level (self-service, assisted, full-service), location and channel.
Worked example
A 1,200 sq ft shop sells only baby care: diapers, formula, clothing and toys. Staff advise parents, and the shop delivers locally through WhatsApp orders. The narrow category with deep range and advice makes it a specialty store. WhatsApp delivery is an add-on channel, not a separate ownership format. It is not a supermarket because the assortment is not broad groceries, and not a department store because it has no separate departments.
Traps
Do not call wholesale retail: the buyer's purpose decides. Do not classify by floor area alone; a small self-service grocery can be a supermarket-style store. Do not treat e-commerce as a product category; it is a channel. Do not ignore services such as credit, delivery or repair when naming a format.
Key points
- Retail sells to final consumers; wholesale sells to trade buyers.
- Formats differ by assortment, service, ownership and channel.
- Specialty means narrow range with depth; supermarket means broad grocery self-service.
- Franchise uses another firm's brand and system under a contract.
- Classify with evidence, not size alone.