(a) Advantage of Departmental Stores
(i) Attract large number of customers: Departmental stores are generally located at central places which help them attract large number of customers
(ii) Convenience in buying everything: By Offering large variety of products under one roof, these stores provide convenience in buying to customers who do not have to run to different stores for their needs.
(iii) Attractive Services: The stores are popular since they provide several services to customers such as credit facilities, rest rooms, restaurants, salons, etc. in their premises.
(iv) Economy of large scale operations: Since they operate on a large scale, the benefits of economy of scale are available to them on purchases.
(v) Promotion of sales: These stores can afford to spend large amounts on marketing and promotional services which helps in increasing sales.
(b) Disadvantage of Departmental Stores
(i) Lack of personal attention: Due to large scale of operations and large number of customers, it is difficult to provide personal attention to each of them.
(ii) High Operating cost: Since these stores provide a lot of attract and additional services to customers, their operating costs become high. In turn they tend to increase the prices of goods, which may reduce their customer base.
(iii) High possibility of loss: Due to high operating costs and large scale operations there is danger of running into losses. In case of sudden change in customer preferences, fashion, etc. they may have to hold clearance sales to clear stocks of old goods.
(iv) Inconvenient location: Due to its central location, the purchase of goods which are needed at short notice, may be inconvenient.
