Wheel of Retailing

Wheel of Retailing

A long-term strategy in which a discount retailer gradually begins to sell higher quality goods. The wheel of retailing allows the retailer to increase its prices over time, leading to higher revenues and perhaps higher profits. The ultimate goal of a wheel of retailing is to develop a discount company into a department store or the equivalent.
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Some historical developments (Table 2) support the cost basis of the wheel of retailing (Brown 1988; Levy and Weitz 1998a).
The wheel of retailing is an educational tool with a strong pedagogic value, but suffers from several problems.
Nevertheless, it is striking that, in an environment where three companies have a very strong command of the total market, the actual evolution and current positions of each of these three retailers exhibits much of the character that the wheel of retailing theory suggests we should expect, but with one important and encouraging addition.
As Curry describes events that provide evidence of Penney's merchandising genius, she identifies environmental factors that turned the wheel of retailing, driving the Golden Rule Stores from low-price, low-overhead innovative retailers in 1902 to a full-service department store chain in the 1960s.
We have watched the wheel of retailing turn more quickly in recent years than it has for some time,') said marketing manager, Phil Prince.
The wheel of retailing ranks high in the pantheon of marketing theory.
There is an exception to almost every rule, not least the wheel of retailing.
The wheel of retailing describes the process whereby retailers enter the market as low-cost, low-status operations and trade up in order to counter competitive actions.
Furthermore he argues that the evolution of warehouse clubs and off-price retailing adheres well to the wheel of retailing theory and this is illustrated by the growth of private label usage by the discounters in order to facilitate continuity of merchandise supply.
Retailing thought, moreover, is characterized by repetition with a 30-year (generational) cycle being apparent in many conceptual contributions, such as central place theory, the gravity model and the wheel of retailing itself[10,11,12].
Since then, the wheel of retailing theory has generated an enormous amount of academic debate, and not a little deprecation.
The wheel of Retailing concept, introduced in 1958 by Professor Malcolm P.