Retail and Wholesale
Market Overview
Retail
Shopping is recognised as one of the major pastimes in the UK. City regeneration schemes are often centred around enhancing existing high streets or the development of brand new shopping centres.
The Retail market has diversified over the past decade and the sector has had to move fast to keep pace. The emergence of new distribution channels, such as the internet enabling weekly grocery shopping being delivered by the supermarket to your home, has meant that it is now even easier for customers to buy goods. Although monthly internet sales have hit £1bn, it remains to be seen whether the internet will become the main distribution channel for retailers and replace high street shopping.
The threat of theft and fraud is high on the list of problems facing the retail sector, with fraud currently costing the industry around £80m a year. The type of theft threats that retailers face are changing. Instead of ram raid type that were popular, losses are now more common involving people walking into a store and using threatening and abusive behaviour towards shop staff. As well as the insurance cost of stock being stolen it has also increased hidden costs such as mental and psychological damage to staff. The introduction of new technology to combat fraud should help reduce the cost of retail fraud. The current roll out of "Chip and PIN" across the UK will lead to significant savings in the fraud bill and create a safer shopping environment.
Violence towards staff is increasingly a problem for retailers. Recent reports suggest that during a year workers suffer from over 16,000 physical assaults, 49,000 threats of attack and 70,000 incidents of abuse. These figures have prompted the governing bodies to set up a Charter of Respect which is a commitment by retailers to protect and support workers in the work place so they can work in a safe environment.
The Disability Discrimination Act (DDA) has been widened to ensure that disabled people are provided with the same service and access as other people and to the same standard. For example, the act stipulates that a retailer's premises must provide suitable access for wheelchair users.
Entry barriers into the retail sector have been remained low over recent times. Established retailers are competing for market share with an increasing number of new entrants. It is noticeable that the majority of these new entrants are from overseas such as Zara, MUJI, Uni Glo and Wal-Mart.
Wholesale
The Wholesale sector has overcome a period where many of the smaller retail outlets have been pressured into closing down due to competition from the larger chains and stores. Many of these larger stores operate their own supply chain from manufacturer to outlets and this is turn is affecting the traditional wholesalers.
Despite increasing moves towards direct supply from manufacturer to retailer, the wholesaler is still a vital cog in the distribution network. It is noticeable that wholesalers have distanced themselves from their traditional role as suppliers to become semi-retail outlets. This blurring of demarcation between themselves and retailers enables them to bypass the retailer and sell directly to the public. Increasing investment and technological advances will see wholesalers take advantage of the internet to gain access to customers.
In summary
As time progresses the fine line between retail and wholesale will continue to blur as the boundaries of each sector continue to be crossed. It is impossible to see the sectors surviving without each other yet there will be less and less reliance on each other.
The development of new technologies and distribution channels are continually creating change in the way retailers, wholesalers and the public interact. Many new companies have exploited new technology to break into these sectors and the technology is leading to a more secure e-shopping environment.
