General Merchandise Retailers: Definition, Types & Examples

Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

Today's general merchandise retailers are different than the quaint notion of a small town general store. There are many categories and specialties that are part of the group. In this lesson, we'll define and examine general merchandise stores.

More Than A General Store

In years past, in pre-Walmart days, many towns had a general store. You might find anything from hardware to toys on the shelves and many were locally owned. People might have to drive a little ways to come into town to shop.

Fast forward to today. In many communities, you don't have to go very far to run into a mega-general merchandiser like Target or Walmart. You can buy toys or a quart of milk at CVS or Walgreens. So, just what is a general merchandise retailer today?

A general merchandise retailer used to be considered one that sold a variety of things excluding groceries, but those lines are blurring (consider, for example, picking up milk at Walgreens). So to help explain this further, let's look at categories that fall under the general merchandise heading.

Department Stores

Just as the name implies, a department store sells a variety of goods and the store is divided into departments or specialty areas. Department stores are typically large (50,000 to 250,000 square feet) and the staff that works in individual departments are supposed to have specialized knowledge. Profit margins are higher here than at discount retailers. For this category, think of Sears, J.C. Penney, and Macy's as being examples.

Full Line Discount Stores

What characterizes a full line discount store (i.e. Walmart and Target)?

  • Extensive width and selection of merchandise
  • Average-to-good product quality
  • Less fashionable items
  • Average atmosphere and minimal services
  • Lots of advertising

Walmart is the dominant full line discount store
Walmart

Specialty Stores

The terms 'specialty store' and 'category specialist' are very similar. For category specialists, think of narrowly focused big box retailers like Office Depot (office supplies) or Best Buy (computers/electronics), or even clothing-only retailers like Gap or Old Navy. Specialty stores tend to have a narrow but deep product assortment and are very product-specific - think of carpet stores or even candle stores like Yankee Candle.

Drug Stores

Talk about a category with blurred lines. Sure, there's Walgreens, CVS, Rite Aid, etc. But now there are pharmacy departments in grocery stores and full line discount stores. Why? It's related to customer convenience - customers would prefer not to have make multiple stops to get their shopping done. A pharmacy department in a grocery store allows the customer to pick up their food and drug items with only one stop.

So what does a drug store offer now that consumers can't find in a grocery store or a store with a pharmacy department? It offers a wider selection of health care products and medicines. In many locations it will have a small primary care clinic (i.e. Minute Clinics in CVS). At these mini-clinics, a medical professional can diagnose routine problems like a sore throat and write a prescription that can be filled at the pharmacy counter (another time-saving shortcut for consumers).

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