What is chain store system? Discuss …

A chain store is a group of similar retail shops that sell the same type of goods. All these shops or branches are under the control of the head office. Branches are opened in different parts of the city or even in different parts of the country.

Advantages of Chain Stores

1. Chain stores specialize in a particular product.

2. Such stores can cater to the needs of people in different localities.

3. Central location and luxurious premises are not required for chain stores.

Disadvantages of Chain Stores

1. As chain stores deal only in a particular item, they may not attract many customers.

2. The head office may find it difficult to exercise control over a number of retail outlets/branches established throughout the city/country.

3. The central office also has to maintain the relevant accounts in respect of every shop and this again is a tedious process.

4. The product quality, price etc., are decided by the controlling office. The retail shops have to sell what is supplied to them.