Retailing Management, 10e (Levy)
Chapter 2 Types of Retailers
1) The most basic characteristic used to describe the different types of retailers is their retail mix,
or the elements retailers use to satisfy their customers’ needs.
2) Walmart is classified as an off-price retailer.
3) To be competitive in today’s marketplace, supermarkets are focusing on offering fresh
perishables and providing better value with private-label merchandise.
4) Supermarkets gain higher profit margins from private-label merchandise than national brands.
5) Private-label brands benefit retailers but not customers.
6) Assortment is the number of different merchandise categories a retailer offers, also known as
the breadth of merchandise.
7) Extreme-value retailers primarily target low-income consumers.
8) Due to the intangibility of their offerings, services retailers often use tangible symbols to inform
customers about the quality of their services.
9) The biggest difference between service retailers and merchandise retailers is their profits.
10) Whereas corporate chains can tailor their offerings to their customers’ needs, single-store
retailers can more effectively negotiate lower prices for merchandise and advertising because of
their larger size.
11) Which of the following statements is true of the North American Industry Classification
System (NAICS)?
A) It was developed by the Federal Trade Commission (FTC).
B) It uses an eight-digit classification system.
C) It was created to collect data on North America’s business activity.
D) It is limited in its use to only manufacturing companies.
E) It is a classification system developed by the United States.
12) With respect to retailing, which of the following best defines assortment of merchandise?
A) Each different item of merchandise offered by a retailer
B) The number of different items offered in a merchandise category
C) The number of merchandise categories a retailer offers
D) Merchandise with minor mistakes in construction
E) End-of-season merchandise that will not be used in following seasons
13) With respect to retailing, which of the following best defines variety?
A) Merchandise with minor mistakes in construction
B) The number of different items offered in a merchandise category
C) End-of-season merchandise that will not be used in following seasons
D) The number of merchandise categories a retailer offers
E) Each different item of merchandise offered by a retailer
14) Because the only merchandise categories at the University Futon Shop are double-sized
futons, the Futon Shop can be said to have no
A) inventory control.
B) need for customer service.
C) variety.
D) irregularity
E) product depth.
15) Which of the following best defines a stock-keeping unit?
A) The number of different items offered in a merchandise category
B) End-of-season merchandise that will not be used by a retailer in following seasons
C) Merchandise with minor mistakes in construction
D) Each different item of merchandise offered by a retailer
E) The number of merchandise categories a retailer offers
16) With respect to retailing, variety is often referred to as the
A) closeouts.
B) assortment of merchandise.
C) irregulars.
D) breadth of merchandise.
E) stock-keeping units.
17) With respect to retailing, assortment is often referred to as the
A) power perimeter.
B) depth of merchandise.
C) closeouts.
D) variety of merchandise.
E) irregulars.
18) The Men’s Wearhouse stocks over 350 different styles and colors of ties. This assortment of
ties can be referred to as the store’s
A) consignment merchandise.
B) closeouts.
C) breadth of merchandise.
D) power perimeter.
E) depth of merchandise.
19) Limited-assortment supermarkets are referred to as
A) extreme-value food retailers.
B) full-line discount stores.
C) conventional supermarkets.
D) consignment shops.
E) warehouse clubs.
20) What type of retailer is Save-A-Lot considered to be?
A) Conventional supermarket
B) Convenience store
C) Category specialist
D) Full-line discount store
E) Limited-assortment supermarket
21) The area around the outer walls of a supermarket that stock fresh-merchandise categories such
as dairy, bakery, meat, produce, etc. is referred to as the
A) power perimeter.
B) convenience rack.
C) closeouts.
D) irregulars.
E) supercenters.
22) The ________ focuses on reducing the carbon footprint caused by the transportation of food
throughout the world.
A) core insight plan
B) locavore movement
C) sustainable agriculture act
D) limited liabilities act
E) non-compete clause
23) Purchasing from factories that pay workers a living wage (more than the minimum wage) and
offer other benefits to the employees is called
A) a closeout.
B) power perimeter.
C) cash wrap.
D) flash sale.
E) fair trade.
24) What type of retailer is Meijer considered to be?
A) Supercenter
B) Department store
C) Full-line discount store
D) Drugstore
E) Category specialist
25) Which of the following is a similarity between hypermarkets and supercenters?
A) Both are common in the United States.
B) Both offer self-service.
C) Both carry a negotiable percentage of nonfood items.
D) Both avoid the sale of perishables.
E) Both lack parking facilities for customers.
26) Which of the following differentiates a hypermarket from a supercenter?
A) Hypermarkets do not offer self-service facilities, whereas supercenters offer self-service
facilities to their customers.
B) Hypermarkets carry a larger proportion of food items, whereas supercenters carry a larger
portion of nonfood items.
C) Hypermarkets have a greater emphasis on dry groceries, whereas supercenters have a greater
emphasis on perishables.
D) Hypermarkets are very common in the United States, whereas supercenters are not common in
the United States.
E) Hypermarkets provide large parking facilities to its customers, whereas supercenters do not
provide parking facilities to their customers.
27) What type of retail store is Costco considered to be?
A) A supercenter
B) A hypermarket
C) A category specialist
D) A warehouse club
E) A department store
28) Which of these is not a relevant challenge for big-box stores while developing locations in
Europe, Japan, and the United States?
A) Limited and expensive land
B) Increased operating costs
C) Restricted building size in some counties
D) Opposing sentiments from local residents
E) Lack of employable workforce
29) Which of the following statements best defines a warehouse club?
A) They are stores that provide a large variety and assortment of merchandise at a convenient
location with speedy checkout.
B) They are large, self-service retail food stores offering about 30,000 SKUs with high inventory
holding costs.
C) They are retailers that carry a broad variety and deep assortment, offer customer services, and
organize their stores into distinct departments for displaying merchandise.
D) They are retailers that offer a limited and irregular assortment of food and general merchandise
with little service at low prices.
E) They are large stores that combine a supermarket with a full-line discount store.
30) Convenience stores ________ than supermarkets.
A) make customers wait in a long checkout line
B) avoid selling lower profit products
C) offer a broad variety and deep assortment of merchandise
D) offer self-service to its customers
E) charge higher prices for similar products sold
31) Which of the following statements is true about warehouse clubs?
A) Warehouse clubs carry a broad variety and deep assortment of merchandise.
B) Warehouse clubs are small and typically located in high-rent districts.
C) Warehouse clubs typically have low inventory holding costs.
D) Warehouse clubs offer extensive customer service.
E) Warehouse clubs offer its fast-selling items at high prices.
32) Which of the following statements is true of department stores?
A) They are usually located in local neighborhoods rather than large regional malls.
B) They often resemble a collection of specialty shops.
C) They can be categorized into two tiers.
D) They focus almost exclusively on hard goods.
E) They offer a limited variety and shallow assortment of merchandise.
33) A retailer that carries a broad variety and deep assortment, offers customer services, and is
organized into distinct sections for displaying merchandise is called a(n)
A) off-price retailer.
B) department store.
C) discount retailer.
D) convenience store.
E) specialty retailer.
34) What type of retailer is Kohl’s considered to be?
A) Off-price retailer
B) Department store
C) Full-line discount store
D) Extreme value retailer
E) Specialty retailer
35) Which of the following is a first-tier department store?
A) Macy’s
B) Nordstrom
C) Sears
D) Kohl’s
E) JCPenney
36) Which of the following is a second-tier department store?
A) Macy’s
B) Neiman Marcus
C) TJ Maxx
D) Nordstrom
E) Saks Fifth Avenue
37) Which of the following is a third-tier department store?
A) Macy’s
B) Neiman Marcus
C) TJ Maxx
D) Nordstrom
E) JCPenney
38) What can department stores do to differentiate their merchandise offering and strengthen their
image?
A) Increase their pricing
B) Decrease the variety and assortment of merchandise within the store
C) Seek exclusive arrangements with nationally recognized brands
D) Merge with faltering retailers to gain their market share
E) Sell only hard goods
39) Attempting to combat losing market share, department stores are doing all of the following
except
A) becoming active participants in omnichannel retailing.
B) adding exclusive merchandise to their assortments.
C) developing stronger marketing campaigns to enhance their store image.
D) placing more emphasis on developing their own private-label brands.
E) increasing their prices to gain more net sales.
40) Private-label brands are also called
A) closeouts.
B) category killers.
C) irregulars.
D) inclusive brands.
E) store brands.
41) Alfani (women’s fashion), Hotel Collection (luxury fabrics), and Tools of the Trade
(housewares) are examples of Macy’s
A) national brands.
B) store brands.
C) irregulars.
D) inclusive brands.
E) closeouts.
42) What type of retailer is Target considered to be?
A) Off-price retailer
B) Department store
C) Full-line discount store
D) Extreme value retailer
E) Specialty retailer
43) To respond to a competitive environment, one thing that Walmart is doing is
A) converting its discount stores into supercenters.
B) leasing retail space in its stores to independent merchants.
C) focusing on high customer service.
D) converting the discount stores into convenience stores.
E) expanding into rural locations.