GDO is an acronym for Large Organized Distribution. GDO refers to the advanced form of retail sales (that is, those with end consumers as customers) that is increasingly popular around the world.
The GDO retail model originated in France in 1830 when the first "department stores" began to appear.
The GDO sales outlets are organized and classified based on their size and structural characteristics.
Features and classification of GDO
The following belong to GDO:
- Hypermarkets: must exceed 2500 square meters in size to be defined as such
- Supermarkets: should have a size ranging from 400 to a maximum of 2500 square meters
- Self-service stores: with sizes varying from 200 to 400 square meters
- Discount stores and cash & carries: with sizes ranging from 200 square meters to 1000 but with a very limited variety of product types
Difference between GD, DO and GDS
The major distinction within the GDO is between GD and DO.
- GD is the large-scale distribution. It includes large supermarket chains such as LIDL or Auchan, for example, which have a single owner (the parent company) and other sub-brands organized with the same business dynamics. The sales points of GD have a widespread network throughout the territory.
- DO is the organized distribution. Examples include Conad or Coop, and other groups that are in fact organized through consortia or organizations but with different ownerships.
Finally, there is another type of business organization: the GDS.
GDS stands for specialized large-scale distribution.
Examples include chains like Acqua & Sapone (specializing in personal care), Euronics (reference point for electronics), and all those groups specialized only in a certain merchandise sector.
Advantages of Large-Scale Retail Trade
The advantages of relying on a broader merchandising organization are several:
- Greater bargaining power: having an already established brand behind you allows the owner to negotiate with suppliers with significantly different relevance compared to the small artisan.
- Tax assistance and training: in many cases, being part of large-scale retail trade enables you to have tax assistance and fiscal support as well as including ongoing training for employees.
- Facilities for rents and leases: in many cases, belonging to these organizations allows for benefits at the real estate level for the sale and purchase of buildings and for rental leases.
Not only do large supermarkets make up the large-scale retail sector (GDO) and the distribution system (GDS), but also many other leading chains in other sectors: from electronics, to personal care, from clothing to sports (Decathlon to name one of the more popular brands).
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