Posted in Marketing and Strategy Terms, Total Reads: 473
Definition: Big Box Stores
Big box stores are those retail stores that occupy a large space and consequently sells items in bulk. It is also known as super store or mega store. Such stores have the advantage of economies of scale and hence can offer products at much lower prices – by reducing profit margin and reaping those benefits through the volume of goods sold.
The name is derived from the fact that these large stores look like big boxes.
These stores generally occupy from 50,000 to 2,00,000 square feet of space. The large structures are situated mostly in the outskirts of the city with large parking spaces. In countries with space constraint the stores occupy lesser space and is spread across different floors.
There can be two types of big box stores-
• stores that sell general merchandise, and
• stores that sell niche/specialty items like books or hardware
Example: Wal mart is a very popular example of such a store. It is a general merchandise store and is following the same business model of opening big box stores across nations. Ikea will be an example of a niche big box store. It sells furniture and hardware in huge stores at low prices achied because of its economies of scale.