Warehouse Retailing

Posted in Marketing and Strategy Terms, Total Reads: 1037

Definition: Warehouse Retailing

Warehouse retailing is a concept of selling large quantities of goods at discounts deeper than those provided in conventional supermarkets or wholesalers. They offer very low prices and little or no customer service at all. The value provided to customers (that include ultimate consumers and small retail outlets) is in the form of discounts and it is overall a rather no-frills experience. The industry rose in significance with dwindling disposable income but has matured over the years owing to unavailability of space, growing real estate prices etc.

Warehouse clubs can be considered as large stores that primarily retail grocery products but may also offer the following merchandise items: furniture, apparel, appliances, personal care products, health and wellness and digital & print media.

Such stores operate from huge, low-overhead warehouse facilities generally located in the outskirts of cities. They do not offer home delivery and don’t accept credit cards for purchases. What is unique about the warehouse clubs is that they offer customers a wide selection of goods (although often in bulk), at highly discounted prices but in exchange, each customer must pay an annual membership fee. Example: Sam’s Clubs, Max Clubs in the US. Star Bazaar, Big Bazaar and Metro Cash and Carry are some of the warehouse retailers in India.

A Sam’s Club outlet looks like this:


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