Retail Expansion Research Articles

Are They Really Different? A Study on Apparel Shoppers’ Retail Format Perception in USA and India

The retailer’s operating environment today is far more complex and interconnected than that which prevailed during the closing of the last century. Given the trends of changing consumer preferences and the growing importance of the emerging destinations for retail expansion, the focus is definitely on the untapped markets owing to their relatively high market growth potential. Whether global or local, the retailer’s adaptation to market conditions is crucial. However, heterogeneity of the business landscape and divergence of consumer tastes in the ‘spiky world’ calls for well suited format adaptations specific to markets. Hence, this article aims to have a clear understanding of the consumers’ perspectives on organized retail forms in two contrasting markets with the pioneering use of single and multi-brand format classifications. The research respectively uses datasets from the developed US market and the potentially strong evolving retail market in India to explore format perceptions of shoppers in the respective scenarios. The forming format perception of 126 sampled apparel shoppers in urban India is compared with 107 sampled respondents from the US with the use of exploratory factor analysis. Consequently, the failure of confirmatory factor analysis (CFA) to confirm the factors in the Indian case is used to highlight some interesting insights on the inherent departures in the status of consumers’ store learning pertaining to the two markets, giving directions for future research and practices in the domain.

Direction and discretion: the roles of centre and branch in the interwar management of Marks and Spencer

The successful expansion of multiple retailing in interwar Britain is often seen to rest, in part, on the inculcation of efficient and uniform working practices throughout a company's branch network. Major multiple retailers often placed considerable stress on codifying the standards expected of store managers and their staff; on creating systems of branch supervision and inspection by staff directly responsible to head office; and on the submission of frequent and detailed returns outlining the operational and financial performance of individual stores. In practice, however, this did not always lead to the degree of operational centralisation and uniformity that is sometimes assumed. Evidence from the Marks and Spencer Archive reveals not only the limitations of local compliance with officially sanctioned policies and processes, but also an expectation that managers would exercise positive discretion in implementing standards in a locally appropriate fashion. The article thus sheds new light on the role of the multiple store manager – hitherto a somewhat neglected figure – in the retail evolution of the interwar years.

Consumer Attitude towards the quality of Perishable Foods in Dhaka City: An Empirical Study

The expansion of global food retailers in emerging economies has made the study of the consumers’ attitude towards perishable food especially relevant at this time. Recently, as competitors of Kaccha Bazaar (flea markets), a lot of supermarkets have made arrangement for selling perishable foods, though at the same time posing a high level of uncertainty and unpopularity regarding overall food quality. This research tries to measure attitudes of consumers of perishable foods on the basis of the propositions advanced by various thinkers like Fishbein (1963), Katz (1960), Cohen (1964) and Kelman (1964). The study formulated a survey to collect information regarding factors like color, tenderness, spot, damage, physical dirt and water-wash for leafy vegetables; color, size, outer-shell, taste, smell and hardness for fruity vegetables; color, belly, smell, source, cold-storing for fish; and color, fat, presence of dirt, bone, moisture and origin for meat. Collected data were analyzed in terms of factors like importance, expectation and perceived actual level of value. It is found that damage-freeness for the leafy vegetables, taste for the fruity vegetables, smell of fish and color and moisture for meat are playing most crucial roles as deciding factors for consumers to purchase them. Finally, the study shows the gap between the expectation and perceived actual level of value in terms of types of perishable foods involved.

The expansion of modern trade food retailing in Thailand

With a population of nearly 70 million people, Thailand is a large and attractive emerging market, drawing investments from various foreign food retailers since the 1980s. An economic crash and currency devaluation in 1997 brought both new challenges and opportunities, and led to a renewed wave of expansion, but also calls for regulation, which had not been strictly enforced. Thailand has been host to transnational retailers from many countries, several of which ultimately withdrew. The competitive landscape has continued to evolve, with a range of new store formats, expanded services, smart phone applications and online shopping, and a push to expand both private label brands and ready-to-eat foods. However, some of these offerings appear to have potential conflicts in terms of Thai consumer behaviour. Thai culture places low importance on time; few shop online, and the majority of consumers have low incomes, and thus may not be attracted to visit modern trade retailers for the same reasons as customers in the retailers' home markets. Despite this, Thailand is currently the second largest global market for 7-Eleven and Tesco's number two international market. This presents a paradox in that Tesco operates hypermarkets, while 7-Elevens are convenience stores. Do Thais want hypermarket style volume discounts, or higher priced convenience, or both? Thais traditionally have shopped in wet markets and enjoy fresh foods, which contradicts attempts by many retailers striving to sell ready-to-eat foods. Many Thais are concerned about face and status, which may be a barrier towards buying private label brands. This paper describes the history and expansion of food retailing in Thailand and also highlights how cultural differences may affect consumer behaviour. As the ASEAN Economic Community (AEC) aims to open borders more broadly, there will likely be more expansion of stores and potentially more cultural differences. Whether transnational or domestic, food retailers may need to further consider aspects of culture and consumer behaviour to determine whether to adapt their strategies, rather than copy and paste formats from abroad.

Globally Themed Organizations as Labor Market Intermediaries: The Rise of Israeli-Palestinian Women's Employment in Retail

This paper examines the labor-market incorporation of minority women. Industrial transformations and the expansion of service and retail have increased women’s labor-market participation, but there remains a large variation between minority women groups, where multiple boundaries may hinder labor-market integration. Past research has explored the role of formal labor-market intermediates in overcoming social boundaries. But a precondition for labor-market intermediation is that majority employers perceive minorities as potential workers and minorities perceive the majority as potential employers. In this paper, we expand the concept of labor-market intermediation to include the social construction of groups as legitimate economic actors, and examine the role of organizational structures in this social construction. Using a comparative analysis of two Jewish malls and nearby shopping streets, and based on 190 interviews with various actors, we show that while supply of workers and demand for work are necessary factors, they are not sufficient for explaining the incorporation of Palestinian women into retail labor markets. Instead, we point to the unintended effect of the globally themed organization of the shopping malls on the erosion of social boundaries and the formation of consumption relations between Israeli-Palestinian women and Jewish employers, which turned into employment relations.

Multi-Scalar Localization and Capability Transference: Exploring Embeddedness in the Asian Retail Expansion of Tesco

Wood S., Coe N. M. and Wrigley N. Multi-scalar localization and capability transference: exploring embeddedness in the Asian retail expansion of Tesco, Regional Studies. This paper revisits the ‘firm in the region’ and the ‘region in the firm’ dichotomy through the case of Tesco's retail expansion in Asia. It focuses on the tension between the transference of proven key capabilities to the host economies Tesco has entered, and strategic localization, primarily for customer-facing, corporate culture, regulatory and institutional reasons. It is demonstrated how the retailer has pursued a multi-scalar adaptive approach that goes beyond any standardized/localized dichotomy to respond to differences between and within national markets. In the process, this paper provides evidence of genuine two-way knowledge flow between the home market and subsidiaries, between subsidiaries themselves, and of subsidiaries granted autonomy and the ability to flex their strategies.

Retail Outlet Engagement and Expansion Program in Indian Telecom Sector

Retail Outlet Engagement and Expansion Program in Indian Telecom Sector

Fashion retailing – past, present and future

This issue of Textile Progress reviews the way that fashion retailing has developed as a result of the application of the World Wide Web and information and communications technology (ICT) by fashion-retail companies. The review therefore first considers how fashion retailing has evolved, analysing retail formats, global strategies, emerging and developing economies, and the factors that are threatening and driving growth in the fashion-retail market. The second part of the review considers the emergence of omni-channel retailing, analysing how retail has progressed and developed since the adoption of the Internet and how ICT initiatives such as mobile commerce (m-commerce), digital visualisation online, and in-store and self-service technologies have been proven to support the progression and expansion of fashion retailing. The paper concludes with recommendations on future research opportunities for gaining a better understanding of the impacts of ICT and omni-channel retailing, through which it may be possible to increase and develop knowledge and understanding of the way the sector is developing and provide fresh impetus to an already-innovative and competitive industry.

Strategic Options for the Expansion of South African Retail Businesses within Africa: Consequences on Operational Management

The expansion of retail companies across national borders is a global phenomenon that is becoming a reality in Africa. This phenomenon is led largely by South African retailers as they seek new markets in Africa. The continent presents both market opportunities as well as challenges. Yet there has been limited academic research on the management of the complexities faced by these retail companies. This paper examines the strategic options available to senior retail management regarding entry mode choices and the possible factors that influence management decisions as they expand their business activities into Africa. The paper also attempts to echo the consequences of such strategic decisions on operational management when it comes to managing operations abroad. It does so by employing mixed method approaches which include analysis of in-depth interviews with senior managers of five major South African retailers, and results of an online survey of retail workers in Cape Town, using the Principal Component (factor) Analysis technique in SPSS. This resulted in six broad factors which appear to provide unique insight on issues that affect the entry mode choices of South African retailers seeking new markets in Africa. The paper concludes that retail managements making this move are often caught up between management self-confidence and their ability to manage risk.

Walmart in South Africa: Precarious Labor and Retail Expansion

In 2011 Walmart's bid to buy a controlling stake in South Africa's Massmart Holdings, Inc. went before the country's Competition Commission and Competition Tribunal, both of which would determine whether to grant the merger outright or to place conditions on it. Massmart Holdings comprises a number of branded subsidiaries in the South African market, including Walmart-style general merchandise dealers, electronics retailers, do-it-yourself building suppliers, and food wholesalers—Game, Dion, Builder's Warehouse, and Makro, respectively—as well as the more recently acquired food retailer, Cambridge Food. South African unions, most prominently the South African Commercial, Catering and Allied Workers Union (Saccawu), with support from the Global Union Federation UNI Global and, in the United States, the United Food and Commercial Workers, fought the merger.

Retail positioning through customer satisfaction: an alternative explanation to the resource-based view

Through exploring factors influencing effective retail positioning strategies in an emerging market environment, this paper challenges the role of isolation mechanism and heterogeneous idiosyncrasy argued by the resource-based view (RBV) theory. By drawing on a sample of 11,577 customers from hypermarkets, electronic appliance specialty stores and department stores in major Chinese cities, we set up 10 hypotheses and confirm a nine-item model for customer-oriented retail positioning (perceived price, store image, product, shopping environment, customer service, payment process, after-sales service, store policies and shopping convenience). Our results show that different retail formats achieve success through the implementation of similar positioning strategies, in which case, it is not heterogeneity but homogeneity that contributes to retailers' success greatly at the development stage of retail expansion. Our results challenge previously proved effectiveness of inimitability to success by the RBV, and support homogenous idiosyncrasy of retailers in the implementation of customer-oriented positioning strategies in an emerging market.

Changing Retail Environment in India - Impact of Government Policy on Organized and Unorganized Retail Sector

India has emerged as the fifth attractive retail destination attracting global retailers for entry and expansion plans (Global retail expansion by A.T. Kearney, 2012). Indian retail market is worth USD 396 Billion in 2012 and estimated to grow by 12% by 2015. Government of India has allowed 51% in multi brand retailing (Minimum investment of USD 100 million) and 100% in single brand retailing. The matter of contention was whether the new FDI policy will replace the existing small scale retail players and Kirana stores. But when we analyse the scale of operations, functional expenses, man power requirement and inventory to be maintained the threat of global retailers to Kirana stores are minimal. The article focuses on the Indian unorganized retailing and organized retailing in the context of changing government policy for the retail sector.

Establishing Territorial Embeddedness within Retail Transnational Corporation (TNC) Expansion: The Contribution of Store Development Departments

Wood S. and Reynolds J. Establishing territorial embeddedness within retail transnational corporation (TNC) expansion: the contribution of store development departments, Regional Studies. Establishing territorial embeddedness within host regions in international retail expansion is well known to be important, although the processes underpinning its realization are less explicit. This research analyses some ‘emerging practices’ of international expansion planning by drawing on interviews across a sample of store development departments. The role of analysts within host regions in evaluating economic, institutional, cultural and social contexts, and appraising the viability of market-entry methods and store formats is explored. The competitive and regulatory dynamism of regions means that behaviour which encourages greater embeddedness following market entry can be particularly helpful in strengthening the marketing and development strategies of international subsidiaries.

Organizational Identity and Identification: Implications for the Localism Movement

Localism is a social movement that is often associated with “buy-local” food initiatives or the prevention of big box retail expansion. However, at its core, localism is also about fostering local ...

Resistance and strategic responses in food supply networks: metro cash & carry in bangalore

.The transnational expansion of large retail and wholesale companies such as Metro, Carrefour and Wal‐Mart has caused changes in the market situation and consequent power shifts, not only in the retail sector but also in the supply networks in host countries. These developments at least potentially endanger the livelihoods of old established retailers, intermediaries and employees of these businesses. Thus, it is not surprising that the investments of the transnational companies can result in resistance from those affected. As an analysis of Metro and its activities in the federal state of Karnataka in India shows, this resistance can influence the activities of the company to develop a modern supply network. This study analyses the way in which the actors of resistance develop and exercise power and how this in turn influences Metro. The global production network (GPN) approach is used as an analytical framework. The results emphasize the importance of networks external to the firm for the analysis of processes of globalization. The company's behaviour cannot be understood unless the resistance is taken into account. The study shows that the GPN framework provides the tools to analyse the influence of actors such as civil society groups, trade unions and associations as part of the production network. However, up to now this option has rarely been used.

Empirical Investigation of Retail Expansion and Cannibalization in a Dynamic Environment

Managers of retail chains who seek to add new stores or close existing ones need to know the net impact of a store's opening/closure on the overall chain performance. This requires inferring the extent to which each store generates incremental sales as opposed to competing with other stores belonging to the chain for the same set of customers. However, when the chain is experiencing a growth or a decline in sales, not accounting for these dynamics in goodwill is likely to yield misleading estimates of incremental sales versus cannibalization. Moreover, firms might have been strategic in opening outlets in locations with favorable characteristics. We need to control for this location endogeneity while inferring the marginal effect of store opening/closure. In this paper, we develop a demand model that accounts for dynamics in goodwill, location endogeneity, and spatial competition between geographically proximate retail outlets. We calibrate the model parameters on both attitudinal and behavioral data for a fast food chain in a large U.S. city. The results imply that consumers perceive a travel cost of $0.60 per mile. As regards the composition of sales at individual stores, on average, 86.7% of sales constitute incremental purchases with the rest derived from cannibalized sales from nearby stores belonging to the chain. We also find significant decay in cannibalization with distance such that when the distance between stores increases by one mile, the sales lost due to cannibalization decreases by 28.1%; there is virtually no cannibalization at a distance of 10 miles. In terms of managerial applications, we discuss how managers can use the model presented in this paper to make two key decisions: (a) isolating locations that can be closed by identifying stores that yield the lowest marginal benefit to the chain and (b) dealing with franchisees' potential concerns about cannibalization. This paper was accepted by Preyas Desai, marketing.

Does Centralising Global Account Management Activities in Response to International Retailers Pay Off?

This study provides insights into how manufacturers adopt their Global Account Management (GAM) activities in response to the increasing expansion of retailers. Specifically, we focus on the manufacturers’ central coordination of two types of GAM activities: strategic and tactical activities. We analyse the manufacturers’ associations with international retailers and with GAM effectiveness and efficiency by using data from 172 manufacturers. Moreover, we consider the suppliers’ dependence on their key retail accounts to be an important moderator within the consumer goods sector. In particular, manufacturers respond to the centralisation of the retailers’ purchasing activities by centralising strategic GAM activities, such as customer strategy, information processing, or price systems. Additionally, manufacturers respond even stronger by centralising tactical activities, such as category management, marketing, or logistics. Although the centralisation of strategic activities drives GAM effectiveness and efficiency, the centralisation of tactical activities does not. This finding might be explained by the specific context of manufacturer-retailer relations. Finally, we find that, although the decision to centralise GAM activities pays off, the benefits are contingent on the particular type of GAM activity and the level of customer dependency.

Foreign retailers in China: the first ten years

Purpose – This paper aims to examine the important factors that influence foreign retailers' expansion in China. By doing so the paper proposes business strategies for foreign retailers to be successful in China and other emerging economies.Design/methodology/approach – A case study approach is employed to build theory. Five case studies were chosen, including the world's four largest retail firms: Wal‐Mart, Carrefour, Metro and Tesco, as well as the Japanese department store Heivado.Findings – The paper identifies six important activities in successful retail expansion: adaptation to the external environment; responses to psychic distance; establishment of business networking; localization; entry strategies into new areas; and the role of local management team. A new framework articulates the interdependent relationships between various factors embedded in retail internationalization, including external environment, internal drivers, psychic distance, and expansion strategies.Practical implications – The...

Country and firm level factors in international retail expansion

PurposeThe purpose of this study is to investigate firm‐ and country‐level drivers of retail performance.Design/methodology/approachA database of the top 200 global retailers was primarily constructed from the 2005 Global Powers of Retailing data. Regression was used to test the hypotheses.FindingsThe predictors are able to explain firm level variations in sales growth, but not ROI. While retailers' sales growth is positively related to expansion speed, it is negatively related to number of retail formats and number of countries of operation. Moreover, retailers who choose to expand into a host country that is less developed, with relatively high disposable income, tend to be more successful than others.Research limitations/implicationsThis study is focused on the foreign expansion process and characteristics of the top performing retailers and their first foreign expansion destination.Practical implicationsFindings reflect differences in internationalization strategies of top retailers. Findings also provide guidance for companies who already have foreign subsidiaries, and for those who are interested in opening new markets.Originality/valueThis paper examines the impact of the economic characteristics of the first host country entered and firm level resources and capabilities on two measures of firm performance. Empirical tests of the impact of retail portfolio management capabilities and international market portfolio management capabilities on retail sales growth are offered.

Offshoring Bias in U.S. Manufacturing

In this paper, we show that the substitution of imported for domestically produced goods and services—often known as offshoring—can lead to overestimates of U.S. productivity growth and value added. We explore how the measurement of productivity and value added in manufacturing has been affected by the dramatic rise in imports of manufactured goods, which more than doubled from 1997 to 2007. We argue that, analogous to the widely discussed problem of outlet substitution bias in the literature on the Consumer Price Index, the price declines associated with the shift to low-cost foreign suppliers are generally not captured in existing price indexes. Just as the CPI fails to capture fully the lower prices for consumers due to the entry and expansion of big-box retailers like Wal-Mart, import price indexes and the intermediate input price indexes based on them do not capture the price drops associated with a shift to new low-cost suppliers in China and other developing countries. As a result, the real growth of imported inputs has been understated. And if input growth is understated, it follows that the growth in multifactor productivity and real value added in the manufacturing sector have been overstated. We estimate that average annual multifactor productivity growth in manufacturing was overstated by 0.1 to 0.2 percentage points and real value added growth by 0.2 to 0.5 percentage points from 1997 to 2007. Moreover, this bias may have accounted for a fifth to a half of the growth in real value added in manufacturing output excluding the computer and electronics industry.