Question

Distinguish between the following:

Departmental stores and Chain stores.

Answer 1

Sr No.	Points	Departmental stores	Chain stores
1	Meaning	It is a large scale retail store having different departments and sections for different type of goods under a same roof.	It is a retail shop owned, controlled and managed by a single organization selling one line of product, located in different parts of city.
2	Variety of goods	Deals with variety of goods in large scale.	Deals with goods of one particular manufacturer only.
3	Location	It is situated at the central location in the city.	It is situated in different parts of the city and country.
4	Capital	Requires large capital for investment.	Comparatively less capital is required.
5	Price	The price charged is very high.	The price is comparatively less.
6	Operating cost	Operating cost is very high.	Operating cost is low.
7	Credit Facilities	Credit facilities are provided to regular and reputed customers.	No credit facilities are provided as all sales are made in cash only.
8	Risk	Risk is more as it is centred on one shop only.	Risk is divided over all the shops.
9	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.