Question

Find some examples of retailers that demonstrate the concept of the wheel of retailing.   

Explain the stages they went through and are in currently.

Answer 1

The Retailing Wheel is a significant theory about retail growth trends in which new types of retailers typically enter the market as low-margin, low-status, low-price traders, slowly gaining more extensive premises and facilities and heading upmarket. In other words, the retail wheel, also known as the retail triangle, refers to how retailers begin as discount stores, but continue to raise their prices as soon as they establish themselves. Finally, they mature as high-cost, high-price, high-end retailers who are vulnerable to the newer market entrants.

The Wheel of Retailing is a theory that defines how retailers approach to gain market share and build brand value." "It explains how retailers typically start at the bottom of the wheel with low prices, profits and prestige and then slowly work their way up to higher prices, profits and prestige. It may not refer to any consumer case. It does, however, help to clarify a variety of consumer patterns in the economies of many nations.

Imagine a fictional person–Fred Kin–opening in a temporary location a new restaurant. He calls it Kin Meals and at very low prices offers a number of limited products. Once the construction of the property has been completed, Fred starts to add more variety and introduces many new services including free home delivery and bed and breakfast. Fred continues to raise prices on his earlier products as Kin Meals builds up a brand image and becomes more popular. He does this in order to quickly recover the fixed costs in order to have an early break-even.

A few years later, though, a new restaurant is joining the scene and is beginning to sell the same things as Kin Meals, but at very low prices. Fred will have to lower his prices back to what they were earlier in order not to lose customers. Fred has passed around the ' retail board ' yes.