The Marketing Book 5th Edition

Retailing 781

1 The manufacturer–retailer franchise, common
in the sale of cars and petrol.
2 The manufacturer–wholesaler franchise, e.g.
franchises to bottle Coca-Cola or Pepsi-Cola.
3 The wholesaler–retailer franchise, which
includes some voluntary groups, discussed
above.
4 The business format franchise, typical in fast
food or car hire.

The benefits of franchising can flow from
achieving the best of both worlds in business,
combining the power, sophistication and repu-
tation of a large organization with the energy,
motivation and commitment of the independ-
ent owner-manager. For well-conceived and
well-managed business formats, franchising
has proved to be a powerful vehicle for
expansion, as in the cases of Body Shop,
Benetton and Seven-Eleven Japan (Sparks, in
McGoldrick, 1994).

Co-operative societies

There is essentially one co-operative movement
in the UK, but its retail activities have been
fragmented into a large number of relatively
autonomous societies. This fragmentation has
been a major reason for the decline in the share
of retail trade held by the co-operatives, in spite
of the potential for buying power and econo-
mies of scale within the movement as a whole.
The Co-op share of UK grocery sales fell from
15 per cent in 1970 to 4.5 per cent by 1998
(Euromonitor, 2000). In 2000, two of the largest
societies finally merged to form the Co-oper-
ative Group (CWS); by then, the Co-operative
Retail Trading Group (CRTG) was also co-
ordinating the buying of 27 societies, represent-
ing nearly 2000 outlets.
The co-operatives have also been under
severe pressure in Europe, Japan and else-
where; by 1990, they had all but disappeared in
Belgium and the Netherlands. However, they
retain pockets of strength, as Table 30.4 illus-
trates. Migros in Switzerland, FDB in Denmark
and Co-op Italia are leaders in their respective

markets. If co-operative societies had earlier

combined internationally, they could have been

Europe’s largest retail organization.

Major retail formats

The type of organization that owns or manages

a store is not always obvious to the consumer.

Other, more striking characteristics of shops

serve to differentiate one format from another

in the minds of shoppers. A retail format can be

defined along a number of different dimen-

sions, including:

single store ↔ group of stores

in-town ↔ out-of-town

large ↔ small

innovative ↔ mature

food ↔ non-food

specialized ↔ generalized

niche ↔ commodity

high added value ↔ discounter

Table 30.4 Co-operatives’

share of food trade

Country Share of food trade

1998

(%)

2003(f)

(%)

Switzerland 59.2 57.2

Denmark 21.5 21.5

Sweden 19.7 20.4

Hungary 16.6 6.0

Poland 13.5 11.7

Norway 9.5 9.4

Italy 6.2 8.4

United Kingdom 4.5 4.3

Source: Euromonitor (2000).