Posted in Marketing and Strategy Terms, Total Reads: 1843
Definition: Chain Stores
Chain stores are a set of outlets of the same company or brand having the same ownership and management and selling the same products/merchandise. Chain stores are often confused with franchises. In franchises, every store will have its own ownership and will bear sole responsibility for its financial position. However, in a chain store, the central ownership bears the responsibility of each of the outlets. Chain stores are able to lower their operating costs by having bulk purchases and other factors contributing to economies of scale.
These stores are generally centralized and follow a single decided course of action. This may however, limit the flexibility and the innovation exhibited by these stores.
Department stores, grocery stores, read-to-wear apparel stores generally operate as chain stores. They draw a huge customer base, mainly due to their low prices and not because of the variety of the products provided.