Practices and Performance of Small Retail Stores in Developing Economies

Abstract

As multinational corporations have expanded beyond the borders of developed economies and into fast-growing developing regions of the world, they have struggled to understand and manage a retail format that is dominant in many of those economies—the small retailer. The authors first synthesize existing literature on the phenomenon of small retailing to deliver a macro perspective of this retail format and its evolution. Then, they delve deeper into an urban market in a developing economy and provide an empirical illustration that sheds light on the decision-making processes of the small retailers and their operational performance. This yields a complementary micro perspective of the phenomenon that has been absent in the literature. The analysis provides insights into how firms that enter markets in developing economies can manage and profit from this important but frequently overlooked distribution format.