11 FEATURES OF CHAIN STORES OR MULTIPLE SHOPS

A chain store is a collection of retail outlets that all offer the same brand of goods and are managed by a head office.

A chain store has the following features or characteristics:

1. Uniformity in prices: The head office of the chain store determines the price at which each good is to be sold across the branches of the chain stores.

Therefore, there is uniformity in the price of goods and services sold in chain stores and no bargaining on the part of the consumer is allowed.

2. Uniformity in the display of goods: Chain stores typically maintain uniformity in displays, look, and operations in addition to keeping uniformity in prices.

This is done to make it simple for customers to recognize the stores.

3. Specialize in one line of product: Chain stores typically sell one or a few related products.

For instance, the manufacturing and selling of eatables is the primary focus of McDonald's restaurants, which are spread out over the globe.

Additionally, chain stores sell identical goods of the same size and quality at all of their outlets in a given area.

Thus, a consumer gets the same quality of goods regardless of the branch of the company he purchases them from.

4. Scale of operation: Chain stores operate a large scale of operation.

They produce and/or sell a large number of products daily.

5. Decentralized selling: Chains stores sell their goods through branches distributed across cities, regions, or even countries.

At the end of each day, each branch deposits the cash realized from the sales of goods into a local bank account on behalf of the head office and a detailed report is sent to the head office about the sales made by the branch office.

It should be noted that consumers can also buy goods directly from the head office.

6. Centralized bulk buying: Although chain stores' sales are scattered among its branches, manufacturing and bulk purchasing of goods are handled at the head office.

The head office purchase or produced goods and then distribute them to the branches as per their requirements.

This way, chain stores can take advantage of economies of scale from large purchases or large production.

7. Cash sales: Chain stores run on a cash and carry basis. They do not sell on credit.

So, only those who have cash on hand or access to a bank can purchase items from chain stores.

8. Flexibility in expansion: Chain stores can easily create new branches whenever the need arises.

The head office only needs to rent a building, then stock it with items from its central depot to establish a new branch.

Furthermore, chain stores have the option of closing any of their branches if they believe it is no longer profitable.

9. Location: Chain stores are typically found in highly trafficked areas of the city or densely inhabited neighbourhoods.

The idea is to serve customers at the point closest to their place of residence or work.

10. Branch management: The branch manager is in charge of the daily operations of the company.

The head office's instructions and directives are, however, followed by every branch.

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11. Policy formulation: The head office set policies for every branch of the chain stores and each branch is expected to abide by the policies while performing its operation.

To ensure compliance, Inspectors are frequently appointed by the head office to check on each branch's compliance with head office directives and policies

To conclude, the major features of chain stores are uniformity in price, uniformity in the display, centralized and bulk purchasing of goods, cash sales and decentralized selling of goods.

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