What Are The Disadvantages Of Departmental Store?

Along with advantages, the departmental store also have certain drawbacks or limitation which both customers as well as the owners have to endure.

1. Departmental store needs higher operating costs

The cost of running a departmental store is very high. Since a departmental store is centrally located the rent for the building is very high. It also offers personal services and facilities, spends more on advertising and gives a high salary to skilled employees. All these expenses increase the overhead expenses of a departmental store.

Image Credits © Kenmore Undressed

2. Departmental store is difficult to supervise

A departmental store has many departments with a large number of selling units. Effective co-ordination, supervision and control of all the departments may not be always possible. This may due to a shortage of qualified staff. Without a team of professional staff, it creates problems of effective supervision and control over the work of employees.

3. Departmental store always needs huge capital

A departmental store has many departments dealing in different lines of products, since it aims at selling everything under one roof. Such a large retail organization always requires a large amount of capital to keep business running.

4. Departmental store maintains high prices

Generally, the prices of goods sold in a departmental store are higher than those in the other small retail shops.

5. Departmental store don't supply all goods

Departmental stores are not capable of conducting all types of retail business. They supply certain varieties of goods. It is physically impossible for them to supply all varieties or kinds of goods.

6. Departmental store has to deal with thefts

In large stores, there are chances of shoplifting, robberies, misuse, etc. The thefts can be committed by customers as well as by staff members.

7. Departmental store gets low customer feedback

Departmental stores offer services to a large number of customers. The salesmen in the stores, being salaried staff can hardly give personal attention to all customers. Due to lack of contact with the customers, their feedback may be very low or sometimes may not be possible.

8. Departmental store needs services of specialists

Departmental store requires services of specialists to plan and to manage the store. However, it is difficult to appoint and maintain specialists.