ACCA Applied Knowledge · Business and Technology · Social and demographic factors
A retailer is assessing a country with high net inward migration of young adults who settle in cities and form new households. Which of the following responses would be the most appropriate and well-founded for the retailer?
The retailer should expand urban stores and adapt its ranges to the needs of new households, including language and cultural preferences. Inward migration of young adults raises urban demand and diversifies tastes, so it affects consumers as well as labour supply, and ignoring it would waste the opportunity.
- AExpand urban stores and adapt ranges, including language and cultural needs, for new householdsCorrect
- BClose urban stores because migration reduces total consumer demand
- CFocus solely on products for retired customers in rural areas
- DAssume demand will stay unchanged because migration only affects labour supply
Explanation
Inward migration of young adults forming households increases urban demand and diversifies tastes, so expanding and adapting the offering is sensible. Migration affects both labour supply and demand, so assuming only labour effects is wrong, and targeting retirees or closing stores ignores the trend.
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