Advantages and Disadvantages of Super Markets
Main advantage is large turnover because of the large variety of merchandise which is offered to the customers. The buyer is perfectly free as to what he should buy.
The following are the merits of super markets:
(i) One roof, low cost: Super markets offer a wide variety of products at low cost, under one roof. These outlets are, therefore, not only convenient but also economical to the buyers for making their purchases.
(ii) Central location: The super markets are generally located in the heart of the city. As a result, these are easily accessible to large number of people staying in the surrounding localities.
(iii) Wide selection: Super markets keep a wide variety of goods of different designs, color, etc., which enables the buyers to make better selection.
(iv) No bad debts: As generally the sales are made on cash basis, there are no bad debts in super markets.
(v) Benefits of being large scale: A super market is a large scale retailing store. It enjoys all the benefits of large scale buying and selling because of which its operating costs are lower.
Main limitations are Supermarket requires huge financial resources and it is normally situated at a long distance from the residential localities.
The major limitations of super markets are as follows:
(i) No credit: Super markets sell their products on cash basis only. No credit facilities are made available to the buyers. This restricts the purchasing power of buyers from such markets.
(ii) No personal attention: Super markets work on the principle of self service. The customers, therefore, don’t get any personal attention.
(iii) Mishandling of goods: Some customers handle the goods kept in the shelf carelessly. This may raise costs in super markets.
(iv) High overhead expenses: Super market incurs high overhead expenses. As a result these have not been able to create low price appeal among the customers.
(v) Huge capital requirement: Establishing and running a super market requires huge investment. The turnover of a store should be high so that the overheads are kept under reasonable level.