Disadvantages of Chain/Multiple Stores
The disadvantages of Chain/Multiple Stores are as follows:
1. Limited Selection of Goods: Some multiple stores only sell a limited number of products. This is especially the case of chain stores, which are owned and operated by manufacturers and, as a result, primarily sell their own products. They do not sell products made by other companies. As a result, consumers have a limited selection of goods. This is not the case with retailer-owned chain stores like Big Apple or Reliance Retail, which sell products from a variety of manufacturers.
2. Lack of Initiative: The personnel in charge of the multiple stores must follow the instructions issued by the head office. This makes them accustomed to looking up to headquarters for guidance on all matters and takes away their initiative to use their creative skills to satisfy customers.
3. Lack of Personal Touch: A lack of initiative in employees can lead to indifference and a lack of personal touch.
4. Difficult to Change Demand: If demand for the merchandise handled by multiple shops changes quickly, management may be forced to incur huge losses due to large stocks remaining unsold at the central depot.
5. No Credit Facility: Credit facility is not provided by Chain/Multiple stores as they deal on cash basis, and because of this, it discourages certain class of customers.
6. Huge Capital Requirements: Huge capital is required in the establishment of Chain stores. So, chain stores may be run only by a company, which has considerable financial resources.
