2015dusssrvol32no1.doc

7/24/2019 2015DUSssrVol32No1.doc

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OPERATION OF THE SUPERSTORE CHAINS IN BANGLADESH: PROBLEMS

AND PROSPECTS

Muhammad Z Mamun, PhD

Prof!!or, In!"#"u" of Bu!#n!! Adm#n#!"ra"#on $IBA%Un#&r!#"' of Dha(a

)

Raf#a Afr#n, L*"urr

In!"#"u" of Bu!#n!! Adm#n#!"ra"#on $IBA%

Un#&r!#"' of Dha(a

Con"a*" Addr!!

Prof!!or Muhammad Z Mamun, PhD

In!"#"u" of Bu!#n!! Adm#n#!"ra"#on $IBA%

Un#&r!#"' of Dha(a

Ema#+: mmamun-'ahoo.*om

/un 0123


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THE SUPERSTORE CHAINS IN BANGLADESH: OPERATING STATUS,

PROBLEMS AND PROSPECTS

ABSTRACT

The superstore chains in Bangladesh are mainly concentrated in densely populated urbanareas. Hassle-free shopping environment, fixed price, one stop service, brand image, quality

commodities and convenient location are the key factors provoking the customers to visit the

superstores. Most preferred superstore products are dry foods, toiletries and cosmetics

folloed by dairy, confectionary and groceries items. The shoppers are found positive about

superstore product quality, and service dimensions! but they agree that the superstore

products are a bit expensive. The shoppers feel the need for more quality perishable goods.

The supply chain management is a ma"or obstacle due to dependency on local market,

distant transportation, middlemen, etc. #or management, inefficiency, pilferage, theft,

shopliftings are regular phenomena in superstores. $e products lines, online shopping

facilities and home deliveries can augment the scope of superstore service.

Key words: brand image, fixed price, one stop service, quality commodities, superstorechains

2.1 BAC4GROUND

A "superstore revolution" has been underway in Bangladesh since the early 1990s. Thesuperstores have earned a lot of popularity aong the urban dwellers in recent years.!uperstores have now gone well beyond the initial upper and iddle class clients to reach theass aret. The effects of this trend touched not only traditional retailers 1# but also thewholesale# processing# and far sectors. The superstore revolution is a "two$edged sword."%n the one hand# it can lower food prices for consuers and create opportunities for farersand processors to gain access to &uality$differentiated food arets and increase incoe. %nthe other hand# it can create challenges for sall retailers# farers# and processors who arenot e&uipped to eet the new copetition and re&uireents fro superstores.

The superstores spread and growth reduces the aret share of traditional retailers. Thisdecline happens at different rates over product categories and locations. The traditional sectorin large cities ' especially sall general stores selling processed foods and dairy products $ isdeclining fast# as they tend to have trouble copeting with superstore chains that buy in buland have econoies of scale. (eclines are slower aong urban traditional retailers who

oderni)e to copete. *iven that any traditional retailers are poor# it is iportant to helpthe oderni)e and copete# or shift assets and sills to transition to other eployent. Anuber of policies can help both traditional retailers and sall farers pursue"copetitiveness with inclusiveness" in the era of the superstore revolution.

+esearch found that the superaret industry has been well positioned to deal with aneconoic slowdown# and industry analysts hope that it will continue to be strong in thisdifficult econoic environent ,-/ 001. 2istory has proven that the superaretindustry is traditionally one of the least$affected industries during ties of slower econoicgrowth. Also# there are soe possible silver linings for the superaret industry in thisdarening econoic cloud. 3onsuers are ore liely to eat at hoe rather than restaurants

if the household budget is tight. 4orers seeing eployent ay have ore tie forshopping and cooing.


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!uperstore business can have great potential in a country lie Bangladesh. At present inBangladesh soe 50 copanies having about 60 outlets ade foray into the business. /n theearly days of the business# around 700 custoers would visit a superstore outlet a day# butsoe 7#000 custoers coe to a store everyday now. Agora# eena Ba)ar# 8! and andan

with liited nuber of outlets are the a;or superstore players. 2assle$free shoppingenvironent# hygienic coodities# fresh vegetables# eat and fish at the superstores areattracting the custoers in superstores. %pportunity to use credit cards is another feature ofthese stores. -resh vegetables directly collected fro the farers are one of the factors forincreasing popularity of the superstores# though soe of the custoers often coplain thatthe perishable goods of the superstores are not always fresh in the superstores.

0.1 LITERATURE RE5IE6

The superaret odel is characteri)ed by self$service shopping with separate departentsfor various consuer ites# discount pricing# large$volue procureent and a centrali)ed

distribution syste. (ifferent superaret chains have targeted specific aret segents andconcentrated on a preferred forat. !oe focus ore on convenience by providing productlines of sall and ediu stores< soe concentrate ore on discounts with a liited rangeof own$brand produce aied at consuers of certain social classes. =ven soe of thesuperarets end with the full range one$stop forats with large# edge of town stores ,-o>and ?orley 00@. 3hristie ,005 has observed that the superstores are convenient inlocation# efficient for weely faily shoppers# on$the$spur shoppers# single life shoppers#and for students who are always on a budget.

-o> and ?orley ,00@ has illustrated that aret supreacy by food distributors andwholesalers gave way to doinance by anufacturers# which in turn succeeded by the rise ofthe integrated distributor retailers ' the superarets. The superarets are ore prone tohave sall scale suppliers so that they can buy goods at lower prices. ost of thesuperarets have huge and centrali)ed distribution chain. The supply chains allowtraceability to ensure safety# &uality# brand differentiation# ris anageent# anddeonstration of due diligence. The superarets associative relationships involve a highlevel of collaboration between retailers and their supply chains# whether food anufacturersor fresh produce suppliers ,4rigley and Cowe 00.

Carson et al. ,007 noted that the iportance of superarets in the world food econoyhas increased radically since early 1990s. !uperarets are now a;or sellers and buyers of

food ites all over the globe. Drbani)ation and the liberali)ation of the services sector havebeen iportant facilitators of this process. !uperarets lin both producers and consuers.Their relatively cheaper and better &uality products contribute positively to the food securityof consuers through global procureent networs# stringent &uality re&uireents andfinancial uscle. The sae factors# however# ipact differently on producers. The supplierswho can abide by the &uality standards# &uantity re&uireents and the business practices ofsuperarets# either alone or in association with others# benefit fro these new retailchannels. They also gain easier access to e>port arets. !aller and poorer producers# whocannot eet these re&uireents# are left out# arginali)ed and often bought out by largerconcerns# e>periencing ipoverishent and subse&uent deterioration in their food security.

/ncreased copetitive pressures due to big chains e>pansion in both scale and scopeultiately underlie the publics preference of the chain stores. The consuers go to


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superstores to save on transportation and other transaction costs inherent in shopping inultiple stores ,Baser et al. 00E. 4al$art# for e>aple# becae custoers choice due tothe convenience of one$stop shopping ,4al$art 199@# p. 6. /n a survey ,8ew 007# it isfound that low prices ,70 F# broad selectionGvariety ,F# and location# hours# and otherconvenience factors ,15F are the paraeters to choose superstores for shopping. /n the

language of Betancourt and *autschi ,1990# 19EE# one$stop shopping is a coondistribution service# that is# one that affects all the goods a retailer sells. That is why 4al$art never coproises with its &uality but at the sae tie never increases the price of its

products.

According to -ortune aga)ine# 4al$art is the ost popular and largest superstore chain inthe world. 4al$art has a very powerful distribution syste which ensures regularavailability of all the products to highest nuber of custoers ,Knowledge H 4harton005. /t follows the strategy of offering products at the lowest and ost copetitive prices./t never coproises with its &uality and doesnt increase the price of product even if theycould slightly. 4al$art believes in long ter opportunities thus concentrates on nurturing

the e>isting custoers and reach new custoers. The success of a superstore also lies in howthat can utili)e its acro environent. -or e>aple 4al$art has great e>pertise in utili)ingtechnical nowledge in its operations. /t uses +-/( software to anage its inventories. 4al$art is one of the copanies that successfully captured the benefits of new inforationtechnology by reengineering its entire business. Apart fro that# it is very efficient in usingits resources.

The superstores are also popular because they present theselves as brands to theircustoers. According to /B/! 4orld ,00E# in$house or private label brands in superaretshave becoe a significant trend within the industry. 8rivate brands are closing in the gap ofnational brands in superarets as erchants are using their retail power to outperfor nae

brand anufacturers. They are offering a liited shelf space and leasing ters andconditions# while others siply give their own private brands preferential treatent# with

proinent shelf space and in store displays.

7.1 OB/ECTI5ES

The broad ob;ective of the study is to identify the probles and prospects of the superstorechains in Bangladesh. !pecifically the study looed into i the current operating status of thesuperstore chains in Bangladesh# ii the types of custoers who visit the superstores# iii thestrengths of superstores and their future prospects# and iv the obstacles behind anaging and

running superstore business in Bangladesh.

8.1 METHODOLOG9

Both priary and secondary data and pertinent literature is used for the study# thougha;ority of the data is obtained fro priary sources. 8riary data is collected throughsurvey of 19I superstore visitors of different deographic groups of (haa city. /nterview isarranged with si> top e>ecutives of si> leading superstores to receive inforation on thecurrent operating status and future prospect of superstores. The sapling procedure is acobination of non probabilistic convenience and ;udgental sapling.

A -ocus *roup (iscussion with nine shoppers# of both superstores and other arets# hasbeen conducted to deterine the variables and have an idea about the consuer perceptions.


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After the discussion the variables were finali)ed to develop the coordination schea and the&uestionnaire was designed based on the schea variables. The &uestionnaire includes openended# close ended# dichotoous and suated Ciert scale odel &uestions. The&uestionnaire has been pretested before finali)ation. The &uestions were checed to ensurethe internal consistency ,The 3ronbachs Alpha value J 0.601 0.6. This research is liited

to the operating status# probles and prospects of superstore chains that are located in (haacity. The lac of unifority aong the superstore chains in ters of the product and servicerange aes inter$chain coparison difficult.

3.1 REPORT FINDINGS

3.2 Ora"#n; S"a"u! of Sur!"or! #n Ban;+ad!h

The idea of all essential coodities below one roofL is the driving force behind the successof superaret business in Bangladesh# which saw around T. 00 crore5investents in thelast five years. 4ith a strong 0$7 percent annual sales growth# soe 50 copanies having

about I@ outlets ade incursion into the business in the capital. According to Bangladesh!uperaret Association ,B!A officials there are also 17 superaret outlets in other citiesof Bangladesh. The following subsections critically analy)e operating status of superstores inBangladesh.

Lo*a"#on

ost of the superarets are situated in different parts of (haa city# the capital ofBangladesh. The areas spread fro posh to iddle incoe household localities. a;orconcentrations of the chains are in densely populated households irrespective of incoegroup consisting of all econoic and social classes. But the a;or ones ,e.g.# Agora# eenaBa)ar# 8! and andan are located in coparatively higher incoe end localities ,e.g.#(hanondi# Banani# *ulshan# Baridhara# etc..

Cu!"omr !#" and !a+!

The pre$launch survey indicated that the superstore chains would attract between I00 and 900custoers on a daily basis# but in reality the stores attracted between I00$000 people daily.!o fro the very first day the superstores have been en;oying war response of thecustoers. Taing all the outlets together# the a;or superstores fetches daily average sales ofT. 1.7 to illion. The posh area outlets do the best as it attracts a lot of custoers with

deep pocets.

Produ*" +#n

The superstore provides all inds of grocery ites# shoes ,brand and self$anufactured#apparel and accessories and gift ites ,e.g.# toys# etc.. 2assle$free shopping environent#hygienic coodities# fresh vegetables# eat and fish# fro)en foods at the superarets arewooing the custoers. Their product line also includes baery# toiletries# clothes# householdaccessories# organic products# prepared foods# and herbal products. Apart fro the essentialssoe superstores usually sell# wide range of electronic products. /n addition the stores alsotry to attract their custoers by foreign products. /n nuber the product line varies fro

1#000$50#000 ites. Besides these# there are food courts and ban branches in few cases.!oe has gy and a beauty salon to ae it a one$stop shopping and service center.


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In&n"or' mana;mn" !'!"m

The superstores trac its inventory through software and weely practical counts. !oe ofthe have sophisticated inventory anageent software to trac suppliers and stoc of ites

developed by reputed international copanies. -or deand forecast ost of the superstoresuse the sub;ective ;udgent. But a few use &uantitative forecasting techni&ues using previousyears sales data and order the necessary aount. /n such cases forecasting software are used.

perience led the superstores to tae necessary &uality control easures.!o the anageent has built up a &uality assurance tea and reinforced their role throughdifferent easures: a checing the suppliers certificates and other necessary docuents# bconfiring the &uality and e>piry dates of the products through regular verification# c

physical inspection of the goods# d following strict procureent principles. !oe of thechains chec inventory on regular basis# convey survey of custoer satisfaction# and conductshelf in&uiry for &uality control. =ven with all the easures the chains are any a tie has

been penali)ed by the obile court drives.

Su+' *ha#n

The superstore chains put special ephasis on supply chain anageent. ost of the havecreated an ar that sends its staff ebers to various sourcing places to scour for populargrocery products. They have contract with reputed copanies ,e.g.# BA(3 and Agro3oncern# Abdul one *roup# etc. all over Bangladesh. Besides# soe of the have set up

beef$rearing fars of their own. They tae services fro different distributors ,100$500 andsuppliers ,100$@70 both local and foreign. The store applies &uality diensions to procurethe relationship with the suppliers. As the custoers are ainly &uality seeing in nature#there is scope for the local growers to counicate with &uality conscious chains and

proote their &uality products. They soeties arrange training or discussion sessions withsuppliers in order to show different aspects of the foreign products and encourage iprovingthe &uality of the local products.

-resh vegetables are directly collected fro the selected contract farers. !oe growvegetable in its own fields. But the lions share of the supply of all goods is fro contract

growers. !ince they buy any ites directly fro the growers and thus cutting any layersof traders# the grower gets a good price and it gives the an edge in their supply chainanageent. -or soe products they iport the directly. -or perishable goods they orderevery day and for other goods depending on the nature of the product they order analy)ing

previous onths deand. Alost all products are procured under credit through localsuppliers. But the copany pays for soe products# lie il $ right away. They also sourcesfro local wholesale arets lie Karwan Ba)aar. !oe superstores produce any of theirites in$house and have a less coplicated supply chain copared to other superstores thathave to source ost of their products fro suppliers for hoe and abroad.

S"aff#n;


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The superstore chains invest a lot on huan resource developent. They consider it as theircopetitive advantage. Their eployees are highly trained and &ualified. All the staff goesthrough a custoer service training progra conducted by reputed firs and consultants.(epending on the si)e the nuber of staffs per outlet varies fro 70$170 which includessales persons# inventory anagers# counter$stuff and branch anagers.

Pr#*#n;

The super stores generally follow ar up fi>ed pricing ethod. /t avoids fluctuating pricingas it tries not to increase price on the occasion of any special events. !ince they have productsin stoc they do not need to increase the prices too often. And in soe cases# despite buyingsoe products at e>orbitant prices# they do not increase the concerned products price# butrather ad;ust the pricing structure in eeping with the total business.

-or soe high$end chains# price is the secondary concern while &uality is the priary one.Because their custoers are fro upper$iddle and high incoe groups# they are willing to

pay a preiu for the &uality goods they offer. They believe their ain copetitors are othersuperarets# not itchen arets. !o they price their products higher than other arets aslong as the price is coensurate with what other superstores are charging.

3.0 Cu!"omr D#!"#n*"#&n!! of Sur!"or!

5#!#" fr=un*'

-ro the analysis# it is noted that the visit fre&uency followed a positively seweddistribution with a wide range of visit ,0$17. The ean visit found to be @.0I. /t is observedthat a;ority ,1.5F of the superstore visitors usually visit twice a onth ,ode. =&ualnuber of respondents ,1I.6F visit thrice or four ties a onth and about 1.7F visits 7ties a onth. Also a significant nuber ,[email protected] of the respondents visit ore than 7 tiesa onth. /nteresting a sall portion ,.9F of the respondents has never visit superstores. /ncoparison the local aret visit also followed a ore positively sewed distribution with auch wider range of visit ,0$50. The ean visit found to be 7.0. The nuber of visits by therespondents to local arets are ainly once ,15.F# twice ,[email protected]# thrice ,1.IF# andfour ties ,10.5F. Also a significant portion of the respondents visit 7 ,9.F# I ,9.EF and6 ,E.0F ties a onth in the local arets.

5#!#" fr=un*' and !o*#o>*onom#* aram"r!

The study noted a distinct behavioral pattern aong the visitors of superstores. /t is observedthat the feale household ebers visit superstores ore than the ale ebers ,MJ7F.The ean visit of ale and feale is .I and 5.67 respectively. The odal value for fealesvisit fre&uency is @ ,.@F whereas that of ale visitors is ,7.@F. There is also asignificant relation between incoe level and visit fre&uency ,MJ7F. 8eople with lowincoe hardly visit superstores. The ean value of visit for people falling in the incoecategory of 10000$0000# 0000$50000# 50000$@0000# @0000 to 70000# and 70000N are .7#.7@# @.5# @.5# and @.75 respectively. 2ence it can be concluded that with increase in incoethe fre&uency of visit also increases. An inverse wea correlation ,MJ7F was found betweenvisit fre&uency and age ,O J $ 0.1@6 indicating superstore visit fre&uency decreases with

increases in age of the visitors. The visitors of age range 1E$@ years ,P J @.97 and 59$@7 ,P


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J @.75 has a higher fre&uency of visit followed by age group of 5$5E ,P J 5.7 and 7$51,P J 5.5I.

The difference in the visit pattern aong different professions is observed in the study,MJ7F. /t is found that the students visit the ost in the superstores ,P J @.E9# followed by

service holders ,P J @.5# hoeaers ,P J 5.70 and teachers ,P J 5.@@. /t is observed thathoeaers have a higher odal value of visit of @ with a narrower range of visit fre&uency,1$E< whereas students have a wider range of visit fre&uency ,0$17 with a odal value of 5,a positively sewed distribution. /n case of teachers and service holders# the odal value is with a narrow range of visit fre&uency 1$10 and 1$1 respectively. -or other professionalsthe visits are rando# coparatively low and narrow. -or e>aple baners ean visit is 7.16,ode J # range J $10# physicians ean visit is 5.I0 ,ode J # range J 1$E# consultantean visit is 5.16 ,ode @# range J $@# business e>ecutives ean is 5.0 ,ode J # rangeJ $7.

Produ*" rfrn*

The respondents were ased about their choice of aret regarding different product line tofind out their preferred products. The responses are divided into three categories based oncustoer preference: i ost preferred# ii oderately preferred# and iii Ceast preferred,Table 1. ost of the respondents prefer superstore for dry foods ,6E.6F# toiletries ,6.@Fand cosetics ,I7.7F. The ne>t preferred products are dairy products ,7I.5F#confectionary ,[email protected] and groceries ites ,7.5F. %n the contrary# ost of the respondents

prefer the speciali)ed arets for ;ewelry and clothing. !uperstores have opportunity toattract ore custoers if they aintain and ae iproveents on these product lines on the

basis of custoer preference.

Table 1: 8roduct 8reference 3ategory

8roduct line +espondents 8roduct8reference ,F

3lassification of 8roductCine on 8reference

1 (ry food 6E.6F ost preferred

Toiletries 6.@F

5 3osetics I7.7F

@ (airy products 7I.5F oderately preferred

7 3onfectionary [email protected]

I *roceries 7.5F

6 8erishable goods @5.1F Ceast preferred

E *ifts @F9 !tationary 55.5F

10 Toys 55F

11 3rocery 6F

1 Ceather 0.6F

15 Qewelry 1@.@F

1@ 3lothing I.9F

Enronmn" +o'a+"' and d#mn!#on

ost of the respondents visit superstores in the localities which are clean# safe and oreconcentrated with super stores ,70.IF. But in general the consuers love to visit superstores


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of their locality because of accessibility and convenience ,[email protected]. !till there are scopes ofstarting superstore chains in localities at (haa city ,e.g.# ohaadpur and Bashabowhich has very few nubers of superstores.

/t has also been found in the research that around 5I.EF of the respondents stic to a

particular superstore. They are loyal in a sense that they always go to those particularsuperstores. The stores are Agora# Alas# 8!# etc. This leads to the fact that particularsuperstores have created their own pool of custoers to who they ay depend in the futureas well.

3.7 S"rn;"h! of Sur!"or!

Produ*" =ua+#"', &ar#"' and a&a#+a?#+#"'

The custoer perception about product &uality# variety and availability is inde>ed using a 7points Ciert scale ,1: Rstrongly agreeS 7:Rstrongly disagreeS in Table . The result shows

that a;ority of respondents oderately positive to the product &uality# variety andavailability in superarets. The shoppers are found affirative about product availability,1.99 and product variety ,.00. They also too soe e>tent agree that the superstore

products are a bit e>pensive ,.06. At the sae tie# the respondents entioned positivelyabout the &uality of the product ,.1. The respondents are happy about availability of theire>pected brands ,.@7 e>clusive products ,.E0 in the superstores. The shoppers e>pressed&uite indifferent view toward the &uality of the perishable goods found there ,.97. %verallthe respondents e>pressed their satisfaction regarding the overall &uality of the superstore

products ,.17.

Table : 8roduct uality# ?ariety and Availability

Cr#"r#on Ind@ 5a+u

1 The &uality of the products in super aret is better. .1

The superarets offer sufficient variety of products .00

5 The products offered are always available in the superstores. 1.99

@ =>clusive products are ore available in the superarets. .E0

5) =>pected brands of products are available in the superarets. .@7

6) The &uality of perishable goods in the superarets is below standard. .97

6 The products in the superarets are e>pensive. .06

8) %verall product &uality in the superarets is satisfactory. .17

Sr* =ua+#"'

The custoer assessent of the service satisfaction was analy)ed using a 7 points liert scale,1: strongly agree and 7: strongly disagree in Table 5. The shoppers very positivelyentioned about the abienceG environent of the superaret ,1.0# shopping tie ,1.7#eployee courtesy ,1.E1# operation schedule ,1.EI and service consistency ,1.99. Theyalso found superstore service &uite fast ,.01# accurate in easureent ,.0# responsivetowards the custoers ,.0I and located &uiet conveniently ,.17. %verall the custoers arefound satisfied with the superstore services ,.07.

Table 5: !ervice &uality# variety and availability

Cr#"r#on Ind@ 5a+u

1 The superarets are conveniently located. .17


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2) The superarets are ore responsiveness to their custoers. .0I

3) The easureent is accurate in the superstores ,lie weight# pacage etc. .0

4) The superstores render services &uicly. .01

7 The service of superstores is ore consistent. 1.99

I The superstores aintain their opening and closing tie schedule 1.EI

6 The salespersons of the superarets are courteous. 1.E1E !hopping in the superstores is ore tie saving 1.7

9 The abience or the environent of the superaret is better. 1.0

10) The custoers are satisfied with overall service of the superarets. .07

3.8 Pro!*", 6a(n!! and Fu"ur +an of Sur!"or!

Pro!*" for E@an!#on

+egarding prospects for future growth and e>pansion the respondents gave their view

regarding product variety and delivery. The custoer assessent of the product variety anddelivery was shown using a 7$points liert scale ,1: strongly agree and 7: strongly disagreein Table @. The respondents believe that the product variety should be increased ,1.E@ andthey should provide ore branded products ,1.96. /nterestingly the respondents thin thatsuperstores should introduce ore perishable goods ,.07. -ro the inde> value we also seethat the respondents have oderately agreed for the above entioned stateents.

Table @: 3ustoers view regarding product variety and delivery

3riterion ean /nde>

1 !uperarets should increase the type of products they offercurrently.

1.E@

!uperstores should provide ore branded products. 1.965 !uperstores should introduce ore variety of perishable goods. .07

The respondents have also entioned of soe additional facilities to be provided by thesuperstores. a;ority of the custoers thought that the products of the super store are highly

priced and the super stores should lessen the price. The second highest a;ority entionedthe need of guarantee of products. !pecially# the perishable goods have lot of coplaints. !othe custoers thin that the superstores should provide guarantee for its products &uality.%thers include iported food and other ites# increasing the nuber of cash counters and thespace of the isles# online shopping opportunity# hoe delivery service# and car paringfacility. /f the superstores are able to e>plore the following criteria then they will be able

cover wider custoer base.

Pro?+m and 6a(n!!

The study has identified various weanesses of superstores. 3onsuers entioned that thesuperarets products are e>pensive. They also agreed that &uality of perishable goods

provided by the superarets is not &uite satisfactory. Apart fro that they thin that thebrands provided in the superstores are not ade&uate. There are high deands for iportedproducts in the superstores which they are unable to provide. /n addition ost of thesuperstores do not cover e>tensive product lines. They ainly focus on daily consuer

products# groceries# cosetics and toiletries. =lectronic ites# entertainent ites ,e.g.#usic albus# (?(s# etc# food courts# gy# etc.# are not available there. The reason behindthis is that since these facilities are ore capital intensive# they will need stricter onitoring


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and intensive aintenance. The superstore authorities will have to appoint staffs withtechnical nowledge so that they can aintain these products properly to ensure that. Becauseof these factors they are reluctant to introduce these units.

According to the superstore anagers another iportant obstacle they face for anaging the

superstores is aintaining the supply chain. As they have to ensure the &uality to theircustoers they have to be selective about the places they buy their goods. Apart fro thatost of the superstores are unable to provide &uality perishable food ites. The reason

behind this is that they have to rely on local aret# transport facility# iddleen# distance#etc.# which are highly erratic# inconsistent and unreliable. !tarting a new outlet is also anobstacle to the. According to the to e>pand their business they often do not find ade&uatespace to open an outlet. As a superstore taes considerable aount of space they often do notfind ade&uate place to open another outlet in the high deand areas. /nternal control andanageent is also a a;or proble for superstore operation. -or anageent inefficiency

pilferage# theft# are regular phenoenons in superstores.

All these obstacles results into loss of profit and thus lesser custoer coverage. !oe of theseobstacles are not easy to overcoe. !uperstores should place ore ephasis on these factors#to whatever e>tent possible# to overcoe their weanesses.

D#ffrn"#a"#on "oo+!

The respondents were ased to state their preference characteristics of superstores ,Table @.As noted the ost iportant factors are fi>ed price ,@.7F# one stop service ,@1.@F# and

brand iage ,59.1F. e>t in the list coe convenient location ,E.6F# security ,1I.6F#and car paring ,9.EF. %n the other hand# free offers ,7.6F# electronic payent syste,I.5F# transport availability ,@.IF# (iscount ,5.@F# entertainent ,.9F and ebershipfacility ,1.6F are found to be not so iportant factors. This shows that fi>ed price# one stopservice# brand iage and convenience of location are the ey factors provoing the custoersto visit the superstores ostly.

Table 7: !uperstore 8reference 3haracteristics

Fa*"or! Cu!"omr!

mha!#! $%

Fa*"or! Cu!"omr!

Emha!#! $%

1 -i>ed price @.7F 6 -ree offers 7.6F

%ne stop service @1.@F E =lectronic payentsyste

I.5F

5 Brand /age 59.1F 9 Transport availability @.IF4) 3onvenient

locationE.6F 10 (iscount 5.@F

7 !ecurity 1I.6F 11 =ntertainent .9F

I 3ar paring 9.EF 1 ebership facility 1.6F

Fu"ur +an

The prospect of the superaret industry is based on the ey copanies future plan ofe>pansion. ost of the leading superstores strategy is to build a brand of their own$chain asa RBasic (epartental !tore of /nternational standardS all over the country. They consider all

the 170 illion people of Bangladesh as their potential custoers and the copany wouldstrive to reach as any people as possible in the ne>t few years by setting up ore branches


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across Bangladesh. They also want to give their franchise in foreign countries. !o initiallythey started with huge investent under suppliers credit ,T. 0$00 illion.

!o far# other arets have ept the big bite of the aret share. At the stage of e>pansion ofthe superstores as aret leader# they will be interested to dictate a lot in ters of pricing#

other supply ters and products that the custoers cherish. !o# they want to add oreproducts to the shelves in future ,e.g.# clothes and accessories# furniture# gy# entertainentlounge# beauty salon# food court# etc. to ae it a one$stop shopping and service center.

ost of the superstores perishable departent has a Rnot$so$badS reputation. To strengthen itfurther# ost of the superstores have a plan to set the whole supply$chain syste which willenable the to source fro the growers directly with iniu tie and a>iu freshness.They also intend to reduce the iddleen involveent to pass on soe of the preius tothe growers so that the econoic ipact will coe fro botto$up# i.e.# faers would be

priary beneficiaries.

Although the chains are fully funded by the local entrepreneurs# soe see a possibility offoreign investent. %ne has already started negotiation with a foreign copany and it couldae huge investents in the e&uity share of the copany. Also soe of the copanies arefacing difficulty in anaging their stores in light of high copetition and saturation. !o theyare taing a cautious approach in this regard and not going for iediate e>pansion.

.1 SUMMAR9, CONCLUSION AND RECOMMENDATION

!uperstore is a growing industry in Bangladesh which had over T. 0 illion investents inthe last five years. The superstore business is e>panding spatially with the increasing nubersof superstores and their custoer base. The study tried to identify the probles and prospectsof the superstore chains in Bangladesh by surveying superstore anagers and shoppers.a;or concentrations of the chains are in (haa city and in densely populated urban areas.The stores attracting between I00$000 people daily# far fro their e>pected nuber. Thea;or superstores fetch daily average sales of T. 1.7 to illion. /n nuber the product linevaries fro 1#000$50#000 ites. 2assle$free shopping environent# hygienic coodities#fresh vegetables# eat and fish# fro)en foods at the superarets are wooing the custoers.

The superstores trac its inventory through software and weely practical counts. !oe ofthe have sophisticated inventory anageent software to trac suppliers and stoc ofites. To ensure &uality they chec the suppliers credentials# onitor &uality and e>piry

dates# physically inspect the goods and try to follow strict procureent principles. !oe ofthe chains chec inventory on regular basis# carry out survey of custoer satisfaction# andconduct shelf in&uiry for &uality control. The super chains ephasi)e on supply chain withvarious reputed sourcing places. They also tae services fro different selected distributorsand suppliers. -or soe products they iport the directly. -or perishable goods they orderevery day and for other goods depending on the nature of the product. Alost all products are

procured under credit through local suppliers with few e>ceptions# lie fresh il.

The superstore chains invest a lot on huan resource developent. Their eployees arehighly trained and &ualified which includes sales persons# inventory anagers# counter$staffand branch anagers. (epending on the si)e the nuber of staffs per outlet varies. The super

stores generally follow ar up fi>ed pricing ethod. -or soe high$end chains# price is thesecondary concern while &uality is the priary one. Because their custoers are fro upper$


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iddle and high incoe groups# they are willing to pay a preiu for the &uality goods theyoffer. ost of the respondents prefer superstore for dry foods# toiletries and cosetics. Thene>t preferred products are dairy products# confectionary and groceries ites. %n thecontrary# ost of the respondents prefer the speciali)ed arets for ;ewelry and clothing. /thas also been found that the superstores have created their own pool of significant custoer

group who visits the regularly.

/t is noted that the visit fre&uency followed a positively sewed distribution with a widerange of visit ,0$17. The ean visit found to be @.0I. The shoppers visit local arets orethan the superstores. The ean visit found to be 7.0. /t is observed that feale householdebers visit superstores ore than the ale ebers. The visitors of age range 1E$@ yearsand 59$@7 has a higher fre&uency of visit in the superstores. 8eople with low incoe hardlyvisit superstores. 2igher incoe bracet people visits the superstores ore. /t is found thatthe students visit the ost in the superstores# followed by service holders# hoeaers andteachers. An inverse relationship between superstore visit fre&uency and age was observed.ost of the shoppers visit superstores in the localities which are clean# safe and ore

concentrated with superstores. But in general the consuers love to visit superstores of theirlocality because of accessibility and convenience.

The a;ority of respondents are found positive about product &uality# availability and variety.They also too soe e>tent agree that the superstore products are a bit e>pensive. Therespondents are &uite happy about availability of their e>pected brands and e>clusive

products. !till the respondents dee that the product variety should be increased and provideore branded products. The shoppers e>pressed &uite indifferent view toward the &uality ofthe perishable goods but they thin that superstores should introduce ore &uality perishablegoods. The shoppers very positively entioned about the abienceG environent of thesuperaret# shopping tie# eployee courtesy# operations schedule and service consistency.They also found superstore service &uite fast# accurate in easureent# responsive towardsthe custoers and located &uiet conveniently. %verall the custoers are found satisfied withthe superstore product and service.

According to the superstore anagers supply chain anageent is a a;or obstacle forsuperstores anageent. /n the process they have to rely on local aret# transport facility#iddleen# distance# etc.# which are highly erratic# inconsistent and unreliable. !tarting anew outlet is also an obstacle for the due to unavailability of ade&uate space# especially inthe high deand areas. /nternal control and anageent is also a a;or proble forsuperstore operation. -or anageent inefficiency pilferage# theft# are regular phenoena in

superstores.

The study noted that there is aple scope for ore superstore outlets in the country. Theyshould segent their aret for different groups on the basis of price# product# variety and

brand. To respondents fi>ed price# one stop service# brand iage and convenience of locationare the ey factors provoing the custoers to visit the superstores ostly. They can thin ofadding new lines of products and augent their scope of service by providing onlineshopping facilities and hoe deliveries.

No"!

1 The traditional retailers are locali)ed grocery shops with sall capital and selectedconsuer goods catering the needs of the households in their locality.


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The use of creditGdebit cards is still liited in Bangladesh. /n very few places the uses ofthese cards are seen# one of the is superstores.

5 Taa ,T. is the currency of Bangladesh. U 1 J T. E0.00.

Rfrn*!

Baser# =. Klie# !. ?an# 8.2. ,00E# !upersi)e /t: The *rowth of +etail 3hains and the+ise of the RBig Bo>S +etail -orat# D! 3ensus Bureau.

Betancourt# +.# and *autschi# (. ,19EE RThe =conoics of +etail -irs#S anagerial and(ecision =conoics# 9,# pp. 155'1@@.

Betancourt# +.# and *autschi# (. ,1990 R(eand copleentarities# household production#and retail assortentsS,areting !cience# 9,# pp. 1@I'1I1# /-%+!.

3hristie# !onia ,005# !uperarets ' -or 3hoice !hopping# 2istory and 8olicy.-o># T. and ?orley# B. ,00@# !taeholder accountability in the DK superaret sector#

/nternational /nstitute of =nvironent and (evelopentKnowledge H 4harton ,005# The 4al$art =pire: A !iple -orula and Dnstoppable

*rowth# arch 1 ,internet edition.Carson# Bradlow and -ader# ,007# An =>ploratory Coo at !uperaret !hopping 8aths#

,April 007.8+3 ,007# 8ew +esearch 3enter for the 8eople and the 8ress# R4al$art: A *ood 8lace to

!hop but !oe 3ritics TooS# (eceber 17# 007# +eport /(JI7.-/ ,001# /n$(epth -inancial Trends in the !uperaret /ndustry# -ood areting

/nstitute# oveberG(eceber 001# ?ol. 5 ,I./B/! 4orld ,00E# !uperarets *rocery !tores# D.!. /ndustry +eport ,00E# /B/!

4orld# Quly 05.4al$art ,199@# 4al$art !tores# /nc. 4al$art Annual +eport. Bentonville# A+.4rigley# . and Cowe# .!. ,00 +eading +etail: A *eographical 8erspective on +etailing

and 3onsuption !paces. ew Vor# Arnold: Condon and %>ford Dniversity 8ress.

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