How do superstores typically price their products compared to local shops?

Superstores typically offer lower prices compared to local shops due to several key factors. One main reason is their ability to purchase goods in larger quantities, which often results in bulk purchase discounts from suppliers. Additionally, they benefit from economies of scale, meaning that as they grow larger and sell more, their operational costs per unit decrease, allowing them to pass those savings onto customers.

Furthermore, superstores often have a more extensive inventory and a wider variety of products available, which can attract more customers and increase overall sales volume. This higher volume can enable them to maintain lower profit margins while still achieving overall profit growth. By contrast, local shops may have higher prices because they face different cost structures, such as higher per-unit costs for inventory, smaller customer bases, and the added costs of personalized service that they provide. These factors contribute to the general perception that superstores offer lower prices compared to local shops.