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Compare the Advantages and Disadvantages of Departmental Stores and Chain Stores


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by: sahilaggarwalseo@gmail.com
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Date: Thu, 16 Feb 2012 Time: 5:23 AM

They usually sell apparels, furniture, electronic appliances, household items etc. e.g. Shopper Stop.
Advantages
1. Convenient for customers as they get wide variety of products under one roof, so they don’t have to go from one shop to another.
2. Even small margins can reap big profits.
3. Can easily attract customers by the central location.
4. They buy in large quantity so can save on freight charges and acquire heavy discounts.
Disadvantages
1. Since it has to be centrally located to attract more customers, heavy rents and duties are to be paid.
2. Operating cost of such stores is generally high.
3. They have to employee high skilled staff and provide lots of services to the consumer in order to attract and retain them.
4. High marketing and promotional cost.
5. Local retailers suffer the losses.
Chain Stores: Chain stores are the number of retail outlets located at different locations with standardized business method and management under one control.
e.g. McDonald’s:
Advantages
1. They are able to provide economic prices.
2. Common promotional strategies can be used for all the outlets.
3. Shortage of goods in one store can be made up by the other stores.
4. No problem of bad debts as sales is on cash basis and no credit basis.
Disadvantages
1. They offer same variety of products everywhere.
2. Control management does not allow outlet managers to moderate policies as per the location.
3. Sales cannot be made on credit basis, so consumers can buy products for cash only.

Services Rendered by the Retailers
Retailers deal with wholesaler and the final consumers.
1. They provide wide range of products to the consumers.

2. He displays the products for consumer’s convenience.


3. Provides after-sales services, free home delivery, credit facilities etc.

4. Can guide customers about the brands.


5. Help customers to choose the product as per their affording capacity.

6. Locate the retail shop where it’s convenient for the consumers.

Writes notes on the following:
(a) Itinerant Retailers
(b) Ancillary Participants
(c) Consumer Co-operative Store
(d) Merchants Agents
Itinerant Retailers: Retailers who do not have any fixed place instead they are mobile traders. They move from one place to another to sell their products. They generally deal in low priced product like fruits, books, junk jewellery, vegetables etc. They include hawkers, peddlers, pavement traders, market traders.

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