MULTIPLE SHOP or CHAIN STORES:

Examples: Halfords, Richard Shops, W.H. Smith, Tesco, Boots The Chemists, Marks and Spencer, H. Samuel, Burtons.

Features:

• It consists of many similar branch shops in different areas or under one roof.
• Each shop is under the direct control of a branch manager.
• The head office controls all the branch shops.
• Every shop is decorated in the same manner, has the same name and sells the same goods at the standard prices fixed by the head office.
• The chain stores mostly deal in one line of goods (clothes, food, shoes & medicine).
• The stores mostly operate as public limited companies.
• The head office sends out inspectors to make regular checks on all the branches.
• There is centralized buying and administration and decentralized selling through the branches.
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• Advantages:
  • The stores buy goods from the manufacturers in bulk and hence get discounts. So they are able to sell goods to consumers at competitive prices.
  • They have large capital and are able to employ specialists in such matters as buying, publicity, window display, etc,.
  • Losses sustained in one branch can be absorbed in the profits made by other branches.
  • There is economy in advertising as all the branches are included in one advertisement.
  • Slow-selling lines and surplus stock in one area can be transferred to more promising areas, instead of clearing it off at a loss.
  
  
  Disadvantages:
  • There is too much centralized control from head office. So branch managers do not have any freedom.
  • Credit facilities are not offered. So the stores may lose their customers.
  • There is lack of personal touch between the branch shops and the customers.