The Wheel of Retailing

The Wheel of Retailing is a theory that describes how retail businesses typically evolve over time. Retailers often start as small, low-cost stores targeting budget-conscious customers. As they grow and become more profitable, they tend to upgrade their offerings, improve store ambiance, and increase prices. Over time, they may move into more upscale markets, which can invite new, smaller competitors to enter at lower levels, restarting the cycle. Essentially, it's a continuous process where retailers expand and improve, then face new competitors, prompting similar growth patterns again.