Disadvantages of Departmental Stores
The disadvantages of Departmental Stores are as follows:
1. Lack of Personal Attention: Due to the large-scale operations, it is extremely difficult to provide adequate personal attention to customers in these stores.
2. High Operating Costs: As these stores place a higher emphasis on providing services, their operating costs tend to be higher. These costs, in turn, raise the prices of goods. They are not appealing to people with lower incomes.
3. High risk of Loss: Due to various high operating costs and large-scale operations, the risk of loss in a department store is high. For example, if customer tastes or current fashions change, it may be necessary to sell such out-of-date articles in a clearance sale to reduce the large inventory of goods built up.
4. Inconvenient Location: Because department stores are generally located in central locations, they are inconvenient for purchasing goods that are required quickly or for people who prefer to buy goods from nearer shops.
Despite some of these limitations, department stores have become popular in some Western countries due to the benefits provided to a specific class of customers.