Non-consumer based drivers of store success in a South African food retail group

Abstract

The research objective of this study was to determine the key drivers of store success in a large food retail group in South Africa. The group currently operates in excess of 800 stores, managed by independent retailers on a franchise basis. Both the biographical details of the store owners and their management styles, demonstrate considerable variability. The effects of six categories of explanatory variables were related to two overall measures of store success – sales growth and an internal measure of store performance – first pairwise and second, by stepwise multiple regression. The bibliographical profiles of the owners, with the exception of age and marketing experience did not predict store success, nor did the family history or number of stores owned. The legal form of ownership had no influence on performance either. As far as competition is concerned, specific competitors and competition density did not contribute to success, but the distance to the nearest competition was positively related to store performance.
The implementation of category management and an increased frequency of stock take, as examples of operational procedures, were positively associated with performance. Two leadership styles, one related to a clear articulation of values and the other to the management of deviations from set goals did positively impact on store performance. Active participation in the local community was also reflected in improved store performance.
Disappointingly, there was little evidence of significant relationships between retail sales growth and the selected variables. The multivariate model, however, explained approximately twenty per cent of the store performance measurements.