The wheel of retailing cautions discount retailers against trading up their services. According to the theory, the offering of more costly services may cause a firm to lose its ability to be price competitive.

Question

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The wheel of retailing theory suggests that over time, retailers tend to add services and improve their facilities, which increases costs and prices, potentially undermining their original low-price competitive advantage.

The Wheel of Retailing Cautions Discount Retailers Against Trading Up