Multiple Shops
Chain stores or multiple shops refer to the network of retail shops established in localities spread in different parts of the country. These are owned and operated by the same organization and have the same merchandising strategies with the same products and display.
For example, Bata shoe stores, Raymonds. These stores believe in serving the customers at their residential point or work place rather than attracting to a central place. For this reason, these stores are located in populous localities. The purchases for all stores are centralised at the head office. From there, the goods are transferred to various shops according to their requirements.
Features of Multiple Shops
To make our concept clear about this type of retail selling let us learn various features of multiple
shops.
i. Under the same management and ownership these shops are operated at different places
near the customers.
ii. All shops are decorated in the same manner to facilitate easy recognition by customers.
iii.
Multiple shops deal with similar types of goods mostly of everyday use e.g., shoes, textiles,
watches, automobile products, etc.
iv. The price is uniform in all the shops for similar items. The head office fixes the price. This
practice avoids bargaining and cheating.
v. All multiple shops are controlled and managed from the head office.
vi. All multiple shops generally sell goods on cash basis. Credit facility is not available to the
customers.
vii. The goods are purchased or produced at a central place and then supplied to different
branches for sale.
Advantages of Multiple Shops
The multiples shops offer the following advantages to buyer and sellers. Let us learn about them:
i. Easy identification: All multiples shops are often built alike. They have similar shop-front,
display and decorations. This helps the customers to recognise the shops easily.
ii. Elimination of middlemen: Multiple shops are generally owned by big manufacturers. So
the middlemen in the process of distribution, like wholesalers and retailers, are eliminated.
iii. Economies of large-scale: These shops enjoy the benefits of large-scale purchase or
production of goods. Also, due to common advertisements these shops are able to save on
the cost of advertising.
iv. Low Price: The customers can get the goods at a cheaper rate because of low operating
cost and elimination of middlemen in the process of distribution.
v. No bad debts: All sales are strictly made on cash basis. Hence the question of loss due to
bad debts does not arise.
vi. Public confidence: Standard quality and uniform price of the products helps in winning the
confidence of customers. The customers get the genuine and standards goods directly from
the manufacturer. The chances of duplication of goods and cheating do not arise in these
shops.
vii. Convenient location: These shops are usually located in the main market and in busy
shopping centres. So the customers can buy goods of their choice easily from these shops.
Limitations of Multiple Shops
Inspite of all the above advantages, multiple shops also suffer from some limitations.
i. Limited choice: These shops deal in limited variety of products. So the choice of the
customer is restricted to the brand of goods supplied by these shops.
ii. No credit facility: Since the sales are made on cash basis the customer cannot avail of
credit facilities from these shops.
iii. No bargaining: The prices of the products are fixed by the head office. Individual shops
have no control over it. So the customer cannot bargain with salesmen while buying the
goods.
iv. Less initiative: These shops are generally managed by the branch managers and they
follow strictly the instructions of the head office. Hence they generally do not take initiative
and donot have any special interest in satisfying the customers.