Chain Stores or Multiple Shops
A number of identical retail shops with similar appearance normally deal in standardised and branded consumer products established in different localities owned and operated by manufacturers or intermediaries are called as Chain stores or Multiple shops. In USA, these are known as chain stores but these are popular as multiple shops in Europe. They deal only in particular line of product and specialise in the same. Many such shops are in India. For example : Bata.
These shops are located in fairly populous localities where sufficient number of customers can be approached.
ii. Nature of product
These shops deal in a particular product line and specialise in the same product i.e, standardised and branded consumer products.
iii. Centralised management
The manufacturing or procurement of goods for all the retail units is centralised at the head office, from where the goods are despatched to each of these shops.
iv. Fixed price
The prices of goods are fixed and all sales are made on cash basis.
v. Role of Sales personnel
The sales persons play an active role in helping the consumers to complete their shopping i.e., in the slection and choice of their goods as per the tastes.
i. Economies of large scale
Multiple shops are owned and operated by manufacturers or intermediaries. Centralised and bulk buying, results in lower costs.
ii. Elimination of middlemen
Goods are sold in multiple shops at relatively low prices. By selling directly to the consumers, it is able to eliminate unnecessary middlemen
iii. No bad debts
All the sales are made in these shops on cash basis only. So, no bad debts will arise and no reduction of working capitals.
iv. Convenience in shopping
Shops are located in all important areas. Therefore, customers are not required to travel long distances for long distances for making purchases.
v. Public confidence
Multiple shops enjoy public confidence due to fixed prices, standard quality, uniform appearance and selection of goods with the help of salesmen.
i. Limited variety
Multiple shops deal only in limited range of products.
ii. Absence of services
Customers do not get credit, home delivery and other facilities.
iii. Lack of personal touch
The owner loses direct personal contact with the customers. The paid staffs do not take personal interest in each and every customer.
All the branches centrally controlled and uniform policies are adopted for all the shops.