Departmental Store is a large-scale retail shop where a large variety of goods are sold in a single building. The entire building is divided into a number of departments or sections. In each department specific type of goods like stationery items, books, electronic goods, garments, jewellery, etc. are made available. All these departments are centrally controlled under one management.

Once you enter such a store you can do all your shopping by moving from one department to another. To encourage people to do all their shopping in one store, these stores also provide facilities like restaurant, telephone, toilet, ATM etc., for the conveniences of customers. These stores also provide the facility like free home delivery of goods, execution of telephonic order for goods, credit facility, etc.

It is generally located at the main commercial centres of the cities and towns, so that customers from different localities can easily come to buy goods as per their convenience. Big Bazar, Vishal Megamart, Ebony, Shoppers’ stop are some of the leading departmental stores in India.

Merits of Departmental Stores

  1. They sell a large variety of goods to consumers, under one roof. So it saves time and effort of the customers.

  2. Departmental stores offer wide variety of goods produced by different manufacturers.

  3. They buy large volumes of goods, at a time directly from manufacturers, and get good amount of discount from them. They are able to reap the benefits of economies of large-scale operations.

  4. Since these stores are organised on a large-scale basis, they can afford to employ efficient and competent staff to provide the best services.

  5. Each department that is a part of the departmental store in a way advertises for the other departments. While visiting one department customers are attracted to see and even buy the goods displayed in other departments.

In spite of these advantages departmental stores have certain limitations also.

Limitations of Departmental Stores

  1. Large amount of capital investment is required to start and run a departmental store.

  2. They are generally located at places far from residential areas, so they are not very convenient for buying goods of daily use.

  3. The operating cost of the departmental stores is very high since it includes cost of location (in the form of rent or purchase price of building), decoration of building, salary of large number of employees and provision of various facilities for the convenience of customers.

  4. There is no direct contact between owners and customers in departmental stores. It is the employees of the store who interact with customers. The owners do not get first-hand information about the tastes, preferences, likes and dislikes of the customers.