FORCES INFLUENCING RETAIL STRUCTURE

FORCES INFLUENCING RETAIL STRUCTURE

The retail structure is highly dynamic and constantly changing in form. There are so many factors that affect retailing structure but we shall pay special attention to only the population density, population mobility, disposable income, social custom and competition.

THE DENSITY OF POPULATION

The density of population will determine the nature and size of retail organization. In a low density area, there are likely to be small retail outlets dealing in general lines of goods. But in high density areas, there will be large retail outlets with some of them specializing in few product lines.

POPULATION MOBILITY

Population mobility can be looked at from the people’s ability to move to other areas. Such movement may be temporary as when people travel to transact their business or permanent as when they leave their homes to live in other areas. In Nigeria, there is what can be called the rural-urban areas. This type of mobility is bound to affect the structure of retailing because it decrease population in the rural area and increases that of the urban areas.

DISPOSABLE INCOME

The levels of disposable income available to the people also affect the retail structure. Disposable income measures the standard of living of a people. Low disposable income will encourage small retail outlets while high disposable income will stimulate large scale retail outlets. Disposable income means that portion of one’s income which one can spend on oneself after paying for taxes and other essentials.

SOCIAL CUSTOM

The culture of a people also affects retail structure. Until recently, most Nigerians preferred to buy their needs from the open market or small retail outlets instead of large scale retail establishment. This had encouraged small retail outlets to the disadvantage of the big retail outlets. This has a linkage with both the disposable income and the standard of living.

COMPETITION

Competition in retailing institution is of two types, competition between retail institutions of different kinds and competition between institutions of the same kind. In general, competition stimulates growth within the institution and those retailing outlets that cannot cope may decline and eventually liquidate.