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SIZE AND SUCCESS IN RETAIL DISTRIBUTION
Author(s) -
BELLAMY. R.
Publication year - 1946
Publication title -
bulletin of the oxford university institute of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0140-5543
DOI - 10.1111/j.1468-0084.1946.mp8010002.x
Subject(s) - profitability index , monopolistic competition , monopsony , productivity , economies of scale , unit (ring theory) , business , position (finance) , distribution (mathematics) , industrial organization , economics , microeconomics , marketing , monopoly , finance , mathematical analysis , mathematics education , mathematics , macroeconomics
Summary. 1. The Measurement of Success . The problem of measuring success by direct and indirect evidence is discussed. It is proposed to examine the advantages of the large stores and organizations under two broad heads—those which arise from a monopolistic or monopsonistic position, and those which arise from economies of scale. 2. Monopolistic and Monopsonistic advantages . Evidence is produced to show that no advantage in respect either of higher prices or higher Percentage Gross Margins is enjoyed by large enterprises. They are, however, undoubtedly able to buy more cheaply. They are also able to afford higher per unit ‘ selling costs ’ (Publicity, Delivery and other services) which should enable them to attract and maintain a greater volume of sales. 3. Economics of sale . These higher unit selling costs are possible because the other Operating Expenses of large enterprises are lower. They are lower firstiy because of the rising productivity of labour with size, and secondly because the cost of holding stocks does not increase proportionately with sales. 4. Conclusion . Thus the trends towards greater concentration portrayed in our first article are given a basis in the greater profitability of large enterprises. It remains to discuss whether that profitability is achieved at the expense of the consumer.