Define Departmental Store and discuss its advantages and disadvantages.

 A departmental store is a large-scale institution comprising a number of departments, each department specialising in a separate line of products. All these departments are under one roof and one unified control. Department stores offer the widest possible choice of products. The consumer can find all what he needs in one store rather than moving around from shop to shop. These stores are located in central places in big cities so that they are easily accessible to customers. Bigger department stores offer a great number of amenities like restaurants, post and telegraph offices, recreation rooms and car parking. A department store indulges in decentralised buying and centralised selling. In fact, department store is a medium of mass merchandising.

Departmental stores grew up in developed countries mainly to cater to the requirement of well-to-do people who required articles of high quality and looked forward for comfortable shopping. But they have also become popular in urban centres in many developing countries. In India too, we find a number of department stores such as Big Bazar, Spencer’s etc.

Advantages: Departmental stores have the following advantages: 

1) Departmental stores make shopping convenient to consumers by providing them a whole range of goods in one building. 

2) The central location attracts a large number of customers leading to a large turnover. Thus, they can afford to make large profits even with smaller margins. 

3) Bulk-buying by Departmental stores enables them to obtain heavy discounts from manufacturers, and thus buy at a cheaper rate. There are savings in freight charges as well. 

4) Departmental stores can afford to have effective advertising through press, radio and television and thus they are able to attract more and more customers. 

5) Being large business units, departmental stores can afford to employee skilled and expert staff for all their operations and thus they are able to achieve a high degree of efficiency in their working. 

Disadvantages: Departmental stores suffer from the following limitations: 

1) Experience has shown that operating costs of departmental stores tend to become very high because of the necessity to run some departments at a loss to attract customers and heavy emphasis in service. As a result, more often, their goods may be marked at higher prices. 

2) Central location also involves higher rents and thus higher overheads. Central location may not be convenient to persons living in far off places which means that they will make their purchases of articles of everyday use from nearby shops. However, in recent years, departmental stores have branched themselves out to suburban areas as well to reach the customers nearer their location. 

3) It may not be possible for customers in general to receive personal attention which is possible when they deal with small retailers.  

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