Occasionally the competition between suppliers results in the favor of customers to a displacement of not competitive competitors (predatory pricing). Thus, a concentration on a few suppliers who are taking a dominant position can results in oligopoly. In extreme cases, it depends on the supply side to the fact that only one vendor remains, which can thus dictate prices (monopoly). Consequence of such a development is usually a higher price level, the burden on the end user, but the dominant party brings higher profits. In retail, for example, chain store companies can, with individual stores, acquire quasi- monopoly positions, but the competition from other types of supraregional operation and competitors (mail order, online trading) practically does not allow the monopolistic pricing, as it is assumed by the monopoly theory.
Competitive advantages can be obtained, for example through price reduction to get at the goods, by organizing a safe, comfortable, clean and trouble free sale site for the customer, by lending or through additional services and entertainment. The modern trade management has , moreover, has a rich toolbox psycho tactically and strategically oriented retail marketing .
For several years, it is observed that end-users on the one hand “aggressively priced” discounters and, on the other hand, those retail businesses prefer reinforced, which, through entertainment, experiences and special environment get an additional benefit; for example, urban entertainment center. This trend is described as a polarization of retail or as a “loss of the center”.
Some commercial businesses, which were previously assigned in accordance with its business model, try to combine a multi-channel strategy, the advantages of traditional retail and e-commerce, in order to consolidate its position in the market.
Wal-Mart put American agricultural products on average on their way from field to retail 2400 kilometers back.
These and other trends can have problematic effects in urban planning, employment policy and spatial planning ways:
- The shift from large-scale retail enterprises from the grown and planned centers in peripheral areas that cause as retail locations generally lower business costs, threatens an obliteration of the centers.
- Due to the ever progressing market penetration of individual industries by chain stores and retail chains with their largely uniform structural design, the shopping streets of the centers increasingly interchangeable and lose individuality .
- Employment in retail trade is declining for years, as in large-scale farm types fewer staff per sales area is needed.
Translated and adapted from Wikipedia.