The retail industry, being very competitive, not only focuses on providing wide product lines to create competitive advantages, but also emphasizes the importance of its services, particularly maintaining service quality. Using the service quality model a study has been made to find out various service dimensions and sub-dimensions involved in retail service. The study also aims at finding out the service quality gap that arises from the difference between customer expectation and perception. A sample of 150 customers from Kanchipuram town is surveyed for this purpose. The respondents were customers of provisional, neighbourhood stores and groceries. There was not much service quality gap in assurance and tangibles. There was gap in reliability of services. The study identified the service quality gap in retail sectors in Kanchipuram.

Today retailing is one of the largest service sectors of India. With more than 30,000 retail outlets and a total estimated retail turnover of around Rs. 10,00,000 cr the industry is growing fast. Interestingly, only 2% of the industry is comprised of the organized sector. The unstructured and fragmented market constitutes from peddlers, vegetable vendors, neighborhood stores and consumer durable stores to manufacturer owned retail outlets. During the last decade, India's middle and high-income population has notched up an impressive 10% growth in retail sectors.

Decision-making in retailing is very similar to consumer's decision-making for goods. With brands consumer goes through the entire process beginning with "needs" to "post purchase decision-making". The consumer evalutes the quality of goods or services to make a purchase. Tangible goods where quality can be technically and statistically specified can also be checked for conformance with the requirements before it reaches the customer. This will be very difficult in case of service sectors especially in retail services sectors.

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