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The Wheel of Retailing is a theory to explain the institutional changes that take place when innovators enter the retail arena. Products are priced lower than was the case with the earlier form of retailing, this lower pricing is made possible by cost efficiencies that are achieved by factors such as: fewer items offered, smaller staff, Spartan facilities, low rent locations. As the new form of retailing eventually replaces the older, less cost effective form, products are added to their current portfolio, staff is added, facilities are upgraded. ... And, at some point, the ever-increasing prices encourage someone to create yet another innovative, cost effective, new form of retailing which will gradually replace its predecessor. Take Tesco as an example, between 1992 and 1995, the rate of growth in grocery retail sales slowed. ... Tesco was in a strong position to ride these currents. ... However, competitors could adapt their own offers to challenge Tesco. ... This left Tesco’s in a vulnerable phase, therefore as a response Tesco devised an innovative strategy.
Approximate Word count = 843
Approximate Pages = 3.4
(250 words per page double spaced)
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