Wheel Of Retailing is basically a process through which the original low price discounters upgrade their services and after some time gradually increase their prices. After some time these low scale discounters evolve into full line departmental stores. This gives an opportunity to the new low price discounters to develop and the circle continues.
It is a continuous process, in which the new type of retailing forms challenge the established retailers. The new retailers succeed because of low cost and lower margins and in turn upgrade their facilities and offer more services. This makes them increase their costs and prices. And they become more like the conventional retailers and the cycle continues.