A category killer is a
retailer
Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...
, often a
big-box store
A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The te ...
, that specializes in and carries a large
product
Product may refer to:
Business
* Product (business), an item that serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
assortment of a given category.
Their wide merchandise selections, deep supply, large
buying power
Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they wi ...
, and a
comparative advantage
In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. Compa ...
to other retailers can 'kill' a category.
Stores will also die from their limited selections.
In essence, they are a price- or discount-based specialist mass-retailer.
Through selection,
pricing
Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acqui ...
and
market penetration
Market penetration refers to the successful selling of a good or service in a specific market. It is measured by the amount of sales volume of an existing good or service compared to the total target market for that product or service. Market pe ...
obtains a massive
competitive advantage
In business, a competitive advantage is an attribute that allows an organization to outperform its competitors.
A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled ...
over other retailers.
Chains
A chain is a serial assembly of connected pieces, called links, typically made of metal, with an overall character similar to that of a rope in that it is flexible and curved in compression but linear, rigid, and load-bearing in tension. A ...
such as
Office Max,
Best Buy
Best Buy Co. Inc. is an American multinational consumer electronics retailer headquartered in Richfield, Minnesota. Originally founded by Richard M. Schulze and James Wheeler in 1966 as an audio specialty store called Sound of Music, it was rebr ...
,
Bed Bath & Beyond
Bed Bath & Beyond Inc. is an American chain of domestic merchandise retail stores. The chain operates many stores in the United States, Canada, Mexico, and Puerto Rico.
Bed Bath & Beyond was founded in 1971. It is counted among the Fortune 5 ...
and
Hobby Lobby
Hobby Lobby Stores, Inc., formerly Hobby Lobby Creative Centers, is an American retail company. It owns a chain of arts and crafts stores with a volume of over $5 billion in 2018. The chain has 969 stores in 47 US states. Hobby Lobby is owned by ...
were considered category killers.
Once typically found in
power centers, increasingly they are found in or adjacent to (as an outbuilding of) repurposed traditional malls.
Large category killer stores are mostly in mid- and large-sized cities, because a large population is required to be feasible.
Impact
Local merchants in cities with category killers "may suffer a substantial reduction in sales," and stores in a wider radius can be affected by the draw.
Between 1983 and 1993,
Iowans spent 31% less in hardware stores, translating to a loss of 37% in the same time to those stores as a result of category killer stores.
Retailers
Sporting goods stores that are category killers range in footprint from 10 thousand to 40 thousand square feet.
Home Depot
The Home Depot, Inc., is an American multinational home improvement retail corporation that sells tools, construction products, appliances, and services, including fuel and transportation rentals. Home Depot is the largest home improvement r ...
carries 30 thousand items in 100 thousand square foot stores.
See also
*
Big-box store
A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The te ...
References
External links
*
Competition (economics)
Brand management
Retail formats
Power centers (retail)
Superstores
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