In 2000,Samantha Toller started a small fast-food restaurant.In order to gain a competitive foothold,Samantha offered low prices with very few extras.As her business grew,Samantha started adding services and gradually had to increase prices to cover the costs of these services.Today,Samantha is vulnerable to new,low-price competitors.This is an example of what theory of retail evolution?
A) High price jinx
B) High/low
C) Retail life cycle
D) Wheel of retailing
E) Retail accordion

Question

Quizplus · Accepted Answer

The scenario described is an example of the Wheel of Retailing theory. This theory suggests that retailers often start as low-price, low-service establishments, then gradually add services and increase prices to cover the costs of those added services. However, eventually, they become vulnerable to new, low-price competitors who follow the same cycle, leading to a "wheel" of retail evolution.

In 2000,Samantha Toller Started a Small Fast-Food Restaurant