Effectiveness of Supermarkets as Retail Outlet of Fast Moving Consumer Goods in Nairobi County
Abstract
This study sought to evaluate the effectiveness of supermarkets in the distribution of fast
moving consumer goods in Nairobi County. The objectives of this study were to
determine the effectiveness of supermarkets in the distribution of fast moving consumer
goods in Nairobi County; and to determine the challenges facing supermarkets in
distribution of fast moving consumer goods in Nairobi County. This research used
descriptive research design approach which involved acquiring information about one or
more groups of people about their characteristics, opinions, attitudes or previous
experiences. The study population consisted of one hundred and two (102) supermarkets
listed in the Nation Business Directory (2008). Random sampling was used to select 50
top and middle level managers of retail supermarkets within Nairobi County. The study
used primary data which was collected using a drop pick later semi-structured
questionnaire. Descriptive statistics were used to analyze the data. The analyzed data was
presented in form of frequency, percentages, means and standard deviation tables. Out of
the targeted 80 top and middle level managers in supermarkets, 69 filled and return the
questionnaires making the response rate to be 86.3. The study disclosed that majority
(69.6%) of the top and middle level management for the supermarkets in Nairobi County
are university graduate with only 8.7% being high school certificate holders. The study
findings indicate that supermarkets were effective in the distribution of FMCG products
to a great extent. The study found that supermarkets were consulted before promotions
are run and were sometimes informed before new products were introduced in the
market; Product range was ranked first as affecting the performance of supermarkets in
distribution of fast moving consumer goods in Nairobi County, followed by company
image; relative price; size of market; investment in technology; differentiation and
fragmentation of customers. Product innovation; motivation; and government legislations
affected the performance of supermarkets in distribution of fast moving consumer goods
in Nairobi County to a moderate extent. The study concluded that retail supermarkets
were a key point of sale for FMCGs in Kenya. Supermarkets also offered high quality
services and usually consulted the distributors before and after the promotions run to
advice on the results. The study recommends that supermarket distribution should expand
the storage spaces to hold more varieties of the products. The study was limited to
Nairobi County and future research should be undertaken in other areas and Counties
since the responses may vary depending on the customer base.Future research should be
conducted to include the other components of the retail distribution chain such as the
relationships between provision of distributor welfare programs and behaviour of retail
outlets in Kenya. The future study should be wide enough but limited to particular sectors
to control for the differences in various sectors or focus on specific retail outlets.
Publisher
University of Nairoboi