Definition of Departmental Store:
A Departmental store is a large retail outlet under one roof, which is divided into various sections or departments with each dealing with a particular type of item.
The prices of products in departmental stores are fixed which makes purchases relatively straightforward.
Each department is autonomous with its own manager. Each manager coordinates the activities of all sectional managers. The stores are highly organized. Shoppers can easily move around because of the big area the stores occupy. These stores are found in big cities and central areas, UTC and Spa are good examples of department stores.
Characteristics of Department Stores:
1. It is divided into different departments.
2. A particular type of product is sold in each department.
3. Department stores deal in a different or wide range of goods.
4. Goods are bought in large quantities and sold in smaller quantities.
5. Goods in these stores carry price tags.
6. Each store or department is run independently.
Advantages of Department Stores:
1. Customers are given the opportunity to do their shopping in one place due to the availability of a variety of goods.
2. The prices of goods are relatively cheap because supply is directly from the producers.
3. There is high and rapid turnover
4. The sectional division creates opportunities for more employment.
5. In the event of loss by one department, the profit from another department can offset it.
Disadvantages of Department Stores:
1. A large amount of capital is required to set up this business.
2. Stores are closed on weekends and public holidays.
3. It is associated with high running costs e.g rents, wages/ salaries, electricity, etc
4. Once payment is made, goods cannot be returned by customers.
5. There is no offer of credit to customers.
6. More people would have been employed if not for the system of self-service that is adopted.
7. Prices are strict in departmental stores which makes it impossible for customers to bargain.
8. Attendants, who are used to attending to a large number of customers on a daily basis, may be rude or not show courtesy.
9. A large number of goods on display may confuse the customers.
10. The larger the store is the harder it is to detect theft, especially in small units.