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Difference between Departmental Stores and Multiple Stores

Last Updated : 28 Feb, 2024
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Departmental Stores and Multiple Stores are two types of Fixed Shop Large Retailers. These retailers have a fixed place of sale. They do not move from one location to another in search of customers. They have shops in the market or residential areas. 

Difference between Departmental Stores and Multiple Stores

What are Departmental Stores?

A large establishment, which sells a wide variety of products and aims to satisfy all needs of the customers under one roof is known as Departmental Store. Such stores have many departments and each department deals with a particular variety of products. One can find anything here from ‘pin to plane’. Such stores are commonly found in countries like the USA, but in India, real department stores have not yet come. Some of the examples are Big Bazaar, Reliance Fresh Store, etc. They are centrally located and aim at eliminating middlemen. Some of the advantages are: they attract a large number of customers, offer attractive services, have professional management, etc. It also has some limitations, like it has high operational costs, there is a high chance of losses, and high operational costs.

What are Multiple Stores/Chain Stores?

The network of retail shops, which are owned by a single business enterprise is known as Chain stores or Multiple Stores. The management of such stores is centralised and is established by manufacturers or traders. They have similar appearances in different localities. They deal in a similar line of standardised and branded consumer products. They also have a centrally fixed price, and all the sales are made on a cash basis. Some examples are Domino’s Pizza, Cafe Coffee Day, etc. It has many advantages like economies of scale, elimination of middlemen, no bad debts, etc. It also has some limitations, like limited selection of goods, lack of initiative, lack of personal touch, etc.

Difference between Departmental Stores and Multiple Stores

Basis

Departmental Stores

Multiple Stores/Chain Stores

Location

They are centrally located in the city. They are located in every important locality of the city.

Range of Products

They deal in a large variety of products as the main aim is to satisfy all the needs of customers under a single roof. They are specialised in only one line of product.

Services Offered

They provide several services to the customers, like free home delivery, liberal credit, etc. They provide limited services with respect to guarantee and repair of the products.

Pricing

They do not follow a uniform pricing policy for all departments. Discount is offered on certain products to clear the stock. They maintain a uniform pricing policy and sell the products at fixed prices.

Class of Customers

Customers belonging to higher income groups are attracted by such stores. Customers from all income groups are attracted by them.

Credit Facilities

Credit facilities are provided to regular and reputed customers. No credit facilities are provided as all sales are made in cash only.

Flexibility

There is more flexibility as policies can be changed as per the requirements. There is less flexibility as branch managers have to operate as per instructions received from the head office.

Risk

Risk is more as it is centred on one shop only. Risk is divided over all the shops.

Advertising

Advertisement is done locally as they are usually located in one place. Advertisement is done to cover a larger area as multiple shops are spread throughout the state or country.

Display/Decoration

Every departmental store can adopt different decoration and display styles. Every chain store has a uniform decoration and display style.

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