Question

1.explain why malls with many specialized stores have become a prevalent way of retailing relative to large department stores. How can you reconcile what your answer to this with the following: During the 1980s, several American firms opened “hypermarts,” enormous stores that sold groceries, household goods, hardware, and other products all under one roof?

Answer 1

Recently malls with many specialized stores have become a prevalent way of retailing relative to large department stores.In fact malls are transforming the consumers attitude towards shopping.Recently malls are extending their reach to non metropolitan cities also.There are number of reasons for consumers preferring malls over the large department stores.Malls acts as a centre of attraction for consumers where there can interact and communicate.Malls provides everything under one roof .Malls provide better physical environment and greater ambience compared to the large department stores.Malls also provide entertainment facilities which attracts more number of consumers.In malls there are variety of products available in malls.There are food courts also.
This can be related to the hypermarkets opened by American firms .There are several benefits provided by the hypermarkets. While purchasing from the hypermarkets the economies of scale is large and there lower costs also.Thus the marginal benefit received by the consumers is greater than the marginal costs.These hypermarkets provide one stop for the purchase of large varieties of goods.