Retail Management
Retail Management
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Swarup Barua
Sylhet Agricultural University,Sylhet Bangladesh
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Swarup Barua
Lecturer, Dept. of Agricultural Marketing and Business Management
Sylhet Agricultural University, Sylhet, Bangladesh
[email protected]
Subrata Koiry
Lecturer, Dept. of Agricultural Finace and Banking
Sylhet Agricultural University, Sylhet, Bangladesh
[email protected]
Abstract
It was an attempt to examine the present scenario of retail chain store in Sylhet district of
Bangladesh. Secondary data were collected from published books, various published articles,
websites of different superstores etc. Primary data were collected from 100 customers during
the months of September to October, 2016. Simple descriptive statistics and inferential statistics
were used to analyze the data. The study depicts that most of the customers have positive
perception. Highest discriminating power (DP) obtained for the second statement (located near
to your residents) and lowest for the first statement (offer a wide variety of products). In case of
favourableness and un- favourableness, 89 percent showed favoured attitude while 11 percent
have disfavoured attitude. The correlation coefficient between age, income and distance were
statistically significant at 10 percent and 1 percent level of significance. The KII identified six
most prominent channels. Based on KII the most important channel identified is Farmer –
Collectors – Supermarket - Consumers.
Keywords: Retail chain store, Present Scenario, Likert Scale, KII (Key informant interview),
Sylhet-Bangladesh
INTRODUCTION
The rapid rise of supermarkets in the developing countries has been documented in various
studies (Trail 2006, Dries et al. 2004, Reardon and Berdegue 2002, Reardon et al. 2003, Hu et
al. 2004, Reardon and Hopkins 2006, Godron et al. 2004). In Bangladesh supermarkets have
successfully made a breakthrough in the urban lifestyle with the idea of all essential
commodities under one roof. From the concept of global retailers such as Wal-Mart, Safeway
and Sears, some private organizations have established the retail chain store services in
Bangladesh. Rahimafrooz Superstores Ltd. (RSL) was the first one to launch the first ever retail
chain in Bangladesh in the year 2001.Retail trade is a traditional business in Bangladesh. Its
expansion is keeping pace with the country’s population growth and changes in consumption
patterns which promote economic growth in Bangladesh. This expansion has not been
structurally organized. Until recently, retail had never been perceived as an industry, but rather
as an individual or family business with a very limited scope for organized expansion. Little to no
market information is available on the retail sector, though industry sources indicate that the
size of the food retail sector in Bangladesh could have been $16 billion in 2010, and the number
of retail grocery shops could number more than 1 million. Retail chain store is a large source of
employment in Bangladesh (12 percent), and together with wholesaling it contributed a
combined 14.3 percent to Bangladesh’s GDP in FY 2010-11. Retail and wholesale growth
averaged over 7 percent in the last decade (BBS, 2011).At a strong rate of 15 percent annual
sales growth, about 30 companies with more than 200 outlets already have ventured into the
food marketing in Bangladesh. The annual turnover for supermarkets now stands at around
BDT 15.0 billion (US$192 million), according to the Bangladesh Supermarket Owners
Association (BSOA). BSOA data also indicate that the retail market, which currently is worth
about BDT 747.50 billion (US$ 9.6 billion), is growing at an annual rate of 14 percent and will
reach BDT 3027.25 billion (US$ 38.8 billion) by 2021. Industry observers believe that the
supermarkets will reach turnover of BDT 206.5 billion (US$ 2.6 billion) by 2021 at an anticipated
annual growth rate of 30 percent. This rise in the growth rate from 15 to 30 percent is expected
due to changes in buying habits of Bangladesh’s middle and upper classes, as well as
government policies supporting growth of the supermarket segment, including repeal of the 30-
percent tariff on imported cabinets, showcases, display counters, and refrigerators used in VAT-
registered supermarkets. BSOA leaders also claim that they are offering a hassle-free shopping
environment and hygienic commodities, thus earning the appreciation of middle and upper-class
consumers. Organized retailers in the country currently are more focused on strengthening their
backward linkages in supply chain, a challenge faced by retail chains for managing product
availability. The most organized and disciplined retailers are trying to maintain their own supply
chain management to bring fresh and quality products from farmers directly to stores in urban
areas. There is a dearth of research work on the customers perception about supermarkets in
Bangladesh (Alam and Rana 2013, Farouk 1987, Forid 2013, Azad 1992, Kashem 2012, Hasan
1979 etc.). Sylhet district was selected because supermarkets grow rapidly in this region over
the last few years. The plausible reasons are higher income from foreign remittance, public and
private institutions including educational institutions. Therefore, the study was undertaken to
identify the socio-economic charateristics, customer’s perception and marketing channels of
supermarket. It is expected that this study will examine the entire spectrum of the supermarkets
that will be helpful for the policy-makers to improve the marketing strategies and to forecast the
future aspect of the supermarkets in the country.
METHODOLOGY
The study was conducted in Sylhet city in Bangladesh. The supermarkets located in Sylhet city
were sampled. Sylhet was selected because it is a fast growing and highly populated urban
town and the supermarkets have rapidly spread over the last few years. The large population
implies that the city offers a huge market for food commodities compared to other towns. Data
were collected from both primary and secondary sources. For primary data, a sample of 100
customers was selected by using mall intercept sampling technique through direct personal
interview from the respondents during the month of September to October, 2016. Secondary
data and other relevant information were collected from supermarkets reports, Journals,
publications, Bangladesh Supermarket Owners Association (BSOA) and others. In order to
achieve the objectives, descriptive statisticsand inferential statistics were used.
Likert scale was used to examine perception of the customers about supermarkets.
Predetermined opinions were presented to the respondents and the Likert scaling technique
was used to rate the opinions. Each opinion was given a scale of one to five such as strongly
agree takes a scale of 5, agree a scale of 4, neutral 3, disagree a scale of 2, and strongly
disagree a scale of 1. For determining discriminating power (Ataur, 2015) the following formula
was used:
DP=Q3-Q1
Where,
DP= Discriminating Power
Weighted total, (Q3) =Score × Number who check that score
Weighted mean, (Q1) = Weighted total/ Number in group
that case the head of household find it more profitable to go to market where all the necessary
are available under a single roof.
Table 2 shows the responses of the total number of respondents which were subdivided into
strongly agree, agree, neutral, disagree, and strongly disagree. In this five point continuum,
weights of 1,2, 3,4,5 or 5,4,3,2,1 were assigned the direction of weighting being determined by
the favorableness and un-favorableness of the item. The weights were assigned as follows:
strongly agree, 5; agree, 4; neutral, 3; disagree, 2; strongly disagree, 1. In case of
favorableness, if negative items (i.e. items indicating rejection) had been included in the scale;
their weights would have been reversed. Statements 9and 10 were negative for the context of
supermarket.
separate the highs from the lows. This is called discriminative power (DP) of the item
(http://psychologydictionary.org).
r total mean
High 25 percent 25 17 8 0 0 0 117 4.68 0.40
Low 25 percent 25 7 18 0 0 0 107 4.28
High 25 percent 25 14 11 0 0 0 117 4.68 1.92
Low 25 percent 25 1 10 1 5 8 66 2.64
High 25 percent 25 3 15 2 3 2 89 3.56 1.20
Low 25 percent 25 0 6 2 12 5 59 3.26
High 25 percent 25 12 12 1 0 0 111 4.44 1.16
Low 25 percent 25 1 15 2 4 3 82 3.28
High 25 percent 25 6 11 4 4 0 94 3.76 1.36
Low 25 percent 25 1 5 4 8 7 60 2.4
High 25 percent 25 13 11 1 0 0 112 4.48 1.64
Low 25 percent 25 1 10 6 3 5 71 2.82
High 25 percent 25 3 20 0 2 0 99 3.96 0.84
Low 25 percent 25 1 13 1 8 2 78 3.12
High 25 percent 25 2 9 12 1 1 85 3.4 0.60
Low 25 percent 25 0 7 10 4 4 70 2.8
High 25 percent 25 1 0 0 10 14 111 4.44 0.92
Low 25 percent 25 1 6 1 12 5 88 3.52
High 25 percent 25 0 3 0 15 7 101 4.04 1.28
Low 25 percent 25 1 12 0 7 5 78 3.12
because there exists a large number of people. Huge traffic is a common scenario of this city
now a day. So people want to buy goods and services from those stores where they can easily
go and have their desired items with limited efforts. From table 3 it is seen that, weighted total
and weighted mean for the high (25 percent) were 117 and 4.68, respectively. For low (25
percent) weighted total and weighted mean were 66 and 2.64, respectively. The table 3 shows
that DP value for store location is 1.92, implies that super shop are not available at near to
door.
respectively. The table 3 shows that DP value for this statement is 0.6 that means most of the
customers are aware of the opening time.
Market Intermediaries
A brief description of intermediaries participating in the marketing channels in the study area is
given below.
Farmer
The farmer constituted the primary link of marketing channel. The farmers and various
intermediaries formed linkages in the channels. Most of the farmers sold their product by using
middlemen. Farmers sold cent percent of their produce directly to the supermarket.
Processors
Processors carry on their business on their own or on custom basis. Some processors employ
agents to buy for them in the producing areas, store the produce and process it throughout the
year on continuous basis. They also engage in advertising activity to create a demand for their
processed products. Supermarket collect processed food such as chips, noodles, juice, butter,
jelly, sauce etc. from different processors and agrobased industry in the study area.
Wholesalers
Wholesalers are those merchant middlemen who buy and sell food-grains in large quantities.
They may buy either directly from farmers or from other wholesalers. They sell food-grains
either in the super market or in other markets. They do not sell significant quantities to ultimate
consumers. They own godowns for the storage of the produce. In the study area supermarket
collect their products from different wholesalers through their skilled collectors.
Collectors
Collectors are the employed specialized personnel. Collectors are responsible to supply the
products into the supermarket on demand basis. The manager made the demand of necessary
commodities day to day basis. The collectors collect the product from wholesaler, retailer,
farmers and processors. Sometimes the collector frequently visits the different markets and also
supplies fresh produce to the supermarket.
CONCLUSION
Supermarkets are newly established market phenomenon in the country. These provide a
variety of goods and services under one roof. As the people are becoming time conscious and
they do not have enough time for shopping, urban and semi-urban consumers prefer to buy all
kinds of goods from the superstores. Moreover due to high level of awareness most of the
educated customers now want to purchase the goods from a place where they find hassle free
shopping environment. All these facilities are being offered by the supermarkets. Thus there is a
need to understand the increasing trend of food retailing under supermarkets. Most of the
sampled customers were in an active age group (50 percent within the age group of 26-35 years
and 21 percent within the age group of 18-25 years). On an average the highest literacy rate of
sampled consumer’s was 38 percent. Whereas the national and Sylhet district`s literacy rates
are 51.8 and 45.59 percent, respectively (8). 33 percent sampled customers were involved in
government job and 44 percent customer’s income level is above 45000. Customers are highly
satisfied about product assortments, staff members and opening time . On an average 89
percent customers shows the favoured attitude towards supermarket. Age and income is
statistically significant with customers perception meaning that they had great influence on
visiting the supermarket. As retail chain store business is gaining popularity very quickly, people
engaged in this sector should pay special attention to the growth of this sector.
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