(a) Define a multiple shop (b) State three features of a multiple shop (c) Explain three advantages and three disadvantages of a Multiple shop.

Answer Details

(a) Definition of a multiple shop

A multiple shop (chain store) is a group of two or more retail shops that are owned by the same person or organisation, sell the same class of standardised goods, and are managed under a common central control with uniform pricing and appearance. Examples include Kingsway and UAC chain stores.

(b) Three features of a multiple shop

• There is central ownership and central control from a head office.
• The branches sell the same standardised goods at the same fixed prices.
• Buying is done centrally in bulk, and the shops usually have a uniform layout, colour and name.

(c) Three advantages and three disadvantages

Advantages

• Economies of large-scale buying: central bulk purchasing earns trade discounts, so goods are bought and sold more cheaply.
• Common services save cost: advertising, transport, storage and administration are shared among all branches, reducing cost per shop.
• Wide market and spread of risk: having many branches brings the goods nearer to customers and a loss in one branch can be offset by profits in others.

Disadvantages

• Lack of flexibility: branch managers cannot easily vary prices or stock to suit local tastes because of rigid central control.
• Limited variety: each shop deals in only one class of goods, so customers cannot buy all their needs in one place.
• No credit and impersonal service: sales are usually strictly for cash and the personal relationship between customer and seller is weak.