Puregold: Economies Of Scale

Economies of scale Puregold is perhaps one of the companies that are benefiting from economies of scale, and for good reason. As a dominant player in retailing, the company's size provides it with enormous efficiencies that it uses to keep costs low. For example, its size allows Puregold to do its own purchasing more efficiently since it has roughly 250 large stores worldwide. This gives the company tremendous bargaining power with its suppliers. Not only does it get its products cheaper, but its size allows it more inexpensive distribution.
The retail industry is composed of very large retailers. These retailers are able to build brand loyalty and image for the existing players, thereby adding value to their company. Smaller entrants will
have a hard time entering the retail industry because the large players have the authority and have the cost advantage against new entrants to bid down costs from its suppliers.4

http://www.slideshare.net/bachraj/economies-of-scale-154025704
Learning/experience curve effects
Puregold to focus on original store format. Puregold has decided to drop its brand of smaller Puregold Junior and Extra stores, two smaller store formats used to delineate between store sizes and will instead tailor each store's size and product assortment to the area it is situated in.
Puregold President Vincent Co stated that the smaller stores elicited negative connotations of carrying a fewer assortment of products. He pointed out though that Puregold will retain the superstore or warehouse formats.
Puregold stores will now depend on the market size, the demographics in the area and the population, adjusting the assortment each store will carry depending on whether the area has more end-users or sari-sari or variety stores.5