Modern retailing and its implications for developing countries: insights from retail managers

Abstract

This paper provides insights into modern retailing, its challenges and implications for retail management in developing countries. On average 17 semi-structured interviews were conducted with retail managers in food, furniture and clothing sectors in thirteen locations across the country. Interviews were followed by two focus groups consisting of retail managers and stakeholders from relevant government departments and support institutions. Findings reveal that influx of large foreign retailers in developing countries has made it difficult for both foreign and indigenous retailers to enjoy competitive advantage. Consumer sophistication also makes it challenging for retailers to meet consumer demands. The lack of local sources of supply, unskilled labour, small population, high rental charges, poor infrastructure, inflation and fluctuating currency increase retailers’ costs in an attempt to stay competitive. Finally, product quality declines, bureaucracy in decision-making, poor store image and pressure to meet sales targets, were perceived as common challenges by retailers. This study underscores the dilemma that retailers in developing countries face because of modernization. However, for a more comprehensive assessment, future research could extend to other sub-sectors like electronics, hair salons, auto repairs and the informal sector. A retail association working closely with government to explore means for overcoming retail challenges needs to be established. This study makes a unique contribution by assessing perceptions of retail managers from diverse sectors such as food, clothing and furniture, whereas other studies have concentrated on food retail. This study also focuses on implications of modern retailing in a developing country that has recently experienced substantial transformations that attracted large foreign retailers.