Cannot Get Categories to Display or Function.

I am not new to working with DirectoryPress.
I am presently building a ShopperPress site using the Classic Shop template.
I am experiencing a problem in getting the category folders to display.

In GENERAL SETUP > CATEGORY:
CATEGORY DISPLAY OPTIONS:
EMPTY CATEGORIES: I have “Show (recommended)”.
CATEGORY COUNT: I have “Show”
HIDDEN CATEGORIES: This box does not function at all. No matter what permutation of categories I hide or show, nothing changes with the actual display of the products on the homepage.

In DISPLAY SETTINGS > LAYOUT:
WHICH CATEGORY:
I have tried all permutations and the category folders do not show on the homepage.
If I select “All Categories” then all the products show but no category folders.
If I select any of the categories I have created then only that category´s products will be displayed on the homepage.

I haven´t found a way to view the homepage and see category folders that when clicked take you to the page containing the products within that category.

Can anyone out there please help with this problem.

Thanks and regards,

Keith