logistics: a study in organised food retail”

I

“Influence of Supply chain Alignment and Application

of Technology on Consumer Satisfaction; Evaluating

Efficiency Measuring Mechanism and Outsourcing

Logistics: A study in Organised Food Retail”

Thesis Submitted to the Padmashree Dr. D. Y. Patil University, Department of Business Management

in partial fulfillment of the requirements for the award of the Degree of

DOCTOR OF PHILOSOPHY

In BUSINESS MANAGEMENT

Submitted by

Jyotinder Kaur Chaddah (Enrollment No. DYP-PhD-066100008.)

Research Guide Dr. R. K Srivastava

PADMASHREE DR. D.Y. PATIL UNIVERSITY, DEPARTMENT OF BUSINESS MANAGEMENT,

Sector 4, Plot No. 10, CBD Belapur, Navi Mumbai – 400 614

June 2010

II

“Influence of Supply chain Alignment and Application

of Technology on Consumer Satisfaction; Evaluating



III

DECLARATION

I hereby declare that the thesis entitled “Influence of

Supply chain Alignment and Application of

Technology on Consumer Satisfaction; Evaluating



submitted for the Award of Doctor of Philosophy in

Business Management at the Padmashree Dr. D.Y.

Patil University Department of Business Management

is my original work and the thesis has not formed the

basis for the award of any degree, associate ship,

fellowship or any other similar titles.

Place: Date: Signature of the Guide Signature of the Head of the Dept. Signature of the student

IV

CERTIFICATE

This is to certify that the thesis entitled “Influence of

Supply chain Alignment and Application of

Technology on Consumer Satisfaction; Evaluating


Logistics: A study in Organised Food Retail” and

submitted by Ms. Jyotinder Kaur Chaddah is a

bonafide research work for the award of the Doctor of

Philosophy in Business Management at the

Padmashree Dr. D. Y. Patil University Department of

Business Management in partial fulfillment of the

requirements for the award of the Degree of Doctor of

Philosophy in Business Management and that the

thesis has not formed the basis for the award

previously of any degree, diploma, associate ship,

fellowship or any other similar title of any University

or Institution.

Also certified that the thesis represents an

independent work on the part of the candidate.

Place: Date: Signature of the Signature of the Guide Head of the department

V

ACKNOWLEDGEMENT In the first place, I am indebted to the Padmashree Dr. D.Y.

Patil University Department of Business Management,

which has accepted me for Doctorate program and provided

me with an excellent opportunity to carry out the present

research project.

I wish to express my deep sense of gratitude to my Guide,

Dr R. K Srivastava, and Director, SIES college of

Management Studies for his guidance and useful

suggestions, which helped me in completing the project.

The thesis could not have been completed, if not for the

help and encouragement from various people. I would like

to take this opportunity to thank Dr. Ramamirtham Gopal,

Director and Dean of Padmashree Dr. D. Y. Patil University

Department of Business Management for constantly

motivating me and giving valuable suggestions during the

development of this thesis.

Words are inadequate in offering my thanks to Dr Pradip

Manjrekar, Head-Research Cell for his encouragement

during the research work.

VI

I am highly indebted to Dr. Ajit Singh (Director General), the

Management, library team and Staff of Guru Nanak

Institute of Management Studies for their co-operation and

support in completing the project.

My thanks and appreciations also go to my colleagues Prof

Poonam Chauhan, Prof Rabiya Jidda and Prof Neha Mathur

in helping me in my research work.

Finally, I would like to express my heartfelt thanks to my

parents for their blessings and my friend Dr Sumi Jha for

all the help and wishes for the successful completion of the

thesis.

Place:

Date: Signature of the student

VII

TABLE OF CONTENTS

CHAPTER NO. TITLE

PAGE NO

LIST OF TABLES X LIST OF FIGURES XII LIST OF ABBREVIATIONS XIII EXECUTIVE SUMMARY XIV

CHAPTER -1 Introduction 31.1 Retail 31.1:1 Journey from Traditional to Modern

Retail 3

1.1:2 Key Developments in Food Retail 61.1:3 Food Retail is the Largest Segment

of Organised Retail in India 10

1.1:4 SCM Challenges in Food Retail 111.2 Purpose of Study 151.3 Problems and Issues 161.4 The Study is Specific to Food and

Grocery Retail 17

1.5 Defining Variables for Study 19CHAPTER -2 Literature Review 222.1 Consumer Value And Consumer

Satisfaction 23

2.2 Freshness 302.3 Emphasis on the relevance of

Housekeeping 31

2.4 Food Pricing 352.5 Consumer Complaint Redressing 372.6 Supply Chain 392.7 On Shelf availability & Out of Stock 442.8 Shelf Space Utilization 512.9 Technology in Retail 582.1 Efficiency Measurement Mechanism 642.11 Logistics 652.12 Manpower Utilization 672.13 Gaps in Literature Review 70

VIII

CHAPTER -3 Objectives And Hypothesis 723.1 Objectives 733.2 Hypothesis 75CHAPTER -4 Research Methodology 794.1 Sources of Data 794.2 Sampling 814.2.1 Sampling Design 814.3 Probability Sampling 854.3.1 Random Sampling 854.3.2 Stratified Sampling 874.4 Sample Justification 904.5 Response Rate 924.6 Questionnaire Description 944.7 Reliability Test 974.8 Overcoming errors 994.8.1 Pre-testing the Questionnaire and

the Pilot Study 102

4.9 Relating the questionnaire to research objectives

103

4.1 Approach to recording data 1034.11 Time Period of study 1044.12 Profile of Respondents 1054.13 Data Analysis Techniques 118CHAPTER -5 Result and Analysis 1235.1 Descriptive statistics 1235.1:1 Stock Availability 1245.1:2 Stock Display 1255.1:3 Total Supply Chain (Stock

Availability + Stock Display) 126

5.1:4 Consumer Satisfaction 1275.1:5 Use of Technology 1295.1:6 Measuring of Efficiency of Supply

Chain 137

5.1:7 Outsourcing Logistics 1535.2 Inferential Statistics 1555.2:1 Correlation and Regression 1565.2:2 Chi Square Test 164

IX

5.2:3 ANNOVA 1685.3 Summary of the Hypothesis Findings 169CHAPTER -6 Discussion 1716.1 Hypothesis 1 1726.2 Hypothesis 2 1756.3 Hypothesis 3 1786.3:1 Shelf Space Utilization 1796.3:2 Manpower Utilization 1826.3:3 Customer Complaint Monitoring 1846.3:4 Housekeeping 1856.4 Hypothesis 4 187CHAPTER -7 General Findings 1927.1 Findings from the Retailers 1927.2 Findings from the consumers 1957.3 Proposed Models based on the

hypothesis results(Model 1) 199

CHAPTER -8 Conclusion 202CHAPTER -9 Recommendations 207CHAPTER -10 Limitations of Study 222CHAPTER -11 Future Scope of Study 226CHAPTER -12 Implications of Research 229CHAPTER -13 Annexure 23113.1 Bibliography 23213.2 Questionnaire 263

X

LIST OF TABLES

T.NO. DESCRIPTION PAGE 4.3.2 Classification of Retail sample: The three

formats and their significant characteristics

89

4.12:1 Classification of Data collected on the profile of Age of the respondents

106

4.12:2 Classification of Data collected on the profile of Gender of the respondents

108

4.12:3 Classification of Data collected on the Martial Status of the respondents

110

4.12:4 Classification of Data collected on the educational qualification of the respondents

112

4.12:5 Classification of Data collected on the details of employment of the respondents

114

4.12:6 Classification of Data collected on the details of the size of the family

116

5.1:1 Descriptive Statistics for Stock Availability

124

5.1:2 Descriptive Statistics for Stock Display 1255.1:3 Descriptive Statistics for Total Supply

Chain :(Stock Availability + Stock Display)

126

5.1:4 Descriptive Statistics for Consumer Satisfaction

127

5.1:5 .1 Descriptive Statistics for Use Of Technology in planning and ordering of goods

129

5.1:5 .2 Descriptive Statistics for Use Of Technology, frequency table

130

5.1:5 .3 Descriptive Statistics for Use Of Technology, Retailers Perception

131

5.1:5 .4 Descriptive Statistics for Use Of Technology, Classification of Retailers response

134

5.1:5.5

Descriptive Statistics for Use Of Technology, Giving a Competitive Edge

136

XI

5.1:6.1 Descriptive Statistics for Shelf Space Utilization

139

5.1:6.2

Descriptive Statistics for different formats differ in monitoring manpower utilization2

141

5.1:6.3 Descriptive Statistics for record maintained of consumer complaint

145

5.1:6.4 Descriptive Statistics for monitoring House keeping

148

5.1:6.5 Descriptive Statistics for other parameters of efficiency measuring

151

5.1:7.1 Descriptive statistics for outsourcing logistics

153

5.2:1.1:1

Pearson correlation co-efficient between stock availability, stock display, total supply chain and consumer satisfaction

158

5.2:1.1:2 Regression between Supply Chain And Consumer Satisfaction

160

5.2:1.1:3 Co-efficient Table 161

5.2:1.2:1 Pearson correlation coefficient between Application of Technology and Consumer Satisfaction

162

5.2:1.2:2 Regression between Use of Technology And Consumer Satisfaction

163

5.2:2:1 Chi square table for measurement of efficiency monitoring practices of four important parameters

165

5.2:2:2 Chi square table for measurement of efficiency monitoring practices of other important parameters

167

5.2:3:1 Summary of ANOVA to test the significance of difference in outsourcing between different formats.

169

5.3 Summary Of The Hypothesis, Statistical Tools Used And Results

170

XII

LIST OF FIGURES

Fig.No DESCRIPTION PAGE4.12:1 Classification of Data collected on the

profile of Age of the respondents 106

4.12:2 Classification of Data collected on the profile of Gender of the respondents

108

4.12:3 Classification of Data collected on the Martial Status of the respondents

110

4.12:4 Classification of Data collected on the educational qualification of the respondents

112

4.12:5 Classification of Data collected on the details of employment of the respondents

114

4.12:6 Classification of Data collected on the details of the size of the family

116

5.1:5 .2 Descriptive Statistics for Use Of Technology for Planning and Ordering

131

5.1:5 .3 Descriptive Statistics for Use Of Technology, Retailers Perception

133

5.1:5 .4 Descriptive Statistics for Use Of Technology, Classification of Retailers response

135

5.1:5.5 Descriptive Statistics for Use Of Technology, Giving a Competitive Edge

137

5.1:6.1 Descriptive Statistics for Shelf Space Utilization

140

5.1:6.2

Descriptive Statistics for different formats differ in monitoring manpower utilization2

142

5.1:6.3 Descriptive Statistics for record maintained of consumer complaint

146

5.1:6.4 Descriptive Statistics for monitoring House keeping

149

5.1:7.1 Descriptive statistics for outsourcing logistics

154

XIII

List of Abbreviations

B2B Business to Business

CAGR Compounded Annual Growth Rate

CST Consumer Satisfaction Total

PDS Public Distribution System

POS Point of Sale

OOS Out of Stock

OSA On shelf availability

SCM Supply Chain Management

SCT Supply Chain Total

SKU Stock keeping Unit

Key words: Organised Retailing, Food and Grocery, Retail

formats, Consumer Satisfaction, Stock availability, Stock

Display, Efficiency Monitoring Mechanism

XIV

EXECUTIVE SUMMARY

Retail in India has come a long way. Since 2005 India has

been topping as one of the most attractive destination for

global retailers. The past 4-5 years have seen increasing

activity in food retailing. Total value of Indian retail is

estimated to be US$ 400 billion of which 6% or US$24 billion

is in organized retail. Various business houses have joined

or planning to join the retail bandwagon.

In the rapidly growing segment of organized retail, the

retailers are facing formidable challenge of remaining

competitive in pricing while incurring considerable

investment in real estate and entailing overhead of

organized business. Hence the only way modern retail can

control cost and sustain this explosive growth is by

managing efficiently the supply chain, use appropriate

technology and have effective operational controls.

Against this backdrop, the researcher undertook the study

to explore the effect of supply chain alignment and

application of technology on consumer satisfaction in

organized food retail in India. Further the researcher also

studied the efficiency monitoring practices in different retail

formats. Research was also extended to the area of

outsourcing logistics amongst different organized food and

grocery retail formats.

A total of 1103 consumers from 52 retail outlets in city of

Mumbai were included in the study. The data gathered was

response to a structured questionnaire designed to collect

XV

relevant information. Data was analyzed using relevant

statistical tools of Correlation, regression, chi square and

ANOVA. From the result of the study, it can be inferred that

supply chain alignment as measured in terms of stock

availability and stock display is significantly correlated to

consumer satisfaction. Similarly, use of Technology also

positively impacts consumer satisfaction. The Study also

shows that different store formats differ in giving

importance to measuring important efficiency parameters

like Shelf space utilization, Manpower utilization,

housekeeping, customer complaints.

In terms of outsourcing of logistics there is no significant

difference in practice followed by different store formats;

perhaps this could be due to the fact that still there are not

many dependable logistic service providers available who

can take over this function completely for the retailers. The

researcher also postulated a predictive mathematical model

which can be used by any retail chain as reference for

commissioning their own research in the area of supply

chain management and customer value perception.

Some general findings while interviewing the customers

and retailers which give useful insight to the overall

organized retail business are also included in the thesis.

Recommendations which can improve the overall organized

relevant business have also been included in this thesis

along with the areas where further research work may be

undertaken.

CHAPTERS

CHAPTER 1

INTRODUCTION

Table of Contents

No Titles Page No.

1 Introduction 3

1.1 Retail 3

1.1:1 Journey from Traditional to Modern Retail

3

1.1:2 Key Developments in Food Retail 6

1.1:3 Food Retail is the Largest Segment of Organised Retail in India

10

1.1:4 SCM Challenges in Food Retail 11

1.2 Purpose of Study 15

1.3 Problems and Issues 16

1.4 Why the Study is Specific to Grocery Retail

17

1.5 Defining Variables for Study 19

1 INTRODUCTION :

1.1 Retail :

David Gilbert has defined retail as‖ any business that

directs its marketing efforts towards satisfying the final

consumer based upon the Organisation of selling goods

and services as a means of distribution. (Nair, 2006)

1.1:1 Journey from Traditional to Modern Retail :

Retail in India has come a long way, according to Sengupta

(2004), “India at the time of its independence in 1947 was in

the clutches of a vicious circle of poverty – characterized by

very low per capita consumption and one of the lowest income

levels in the world.” Retailing was focused more on the basic

necessities rather than luxury. In terms of retail institutions,

it was mainly kirana stores run by individuals and the wet

markets or bazaars. There were also the government-run

public distribution system (PDS) as well as different co-

operative stores. All these stores were having counter-

service – self-service was not a feasible option. Even in the

early 1960s, it was reported that ―there is not a single

supermarket in all of India‖ (Westfall and Boyd, 1960, p. 14).

The popular perception is that consequent to the

liberalization and globalization of the Indian economy in the

early 1990s, modern retail took off in India somewhere in

the mid-1990s. However, research shows that it was much

earlier – in 1971 – when the first ―supermarket‖ – the face of

modern retail – was set up in India in the form of Nilgiris at

Bangalore.

Until the late 1990s, food retailing had been concentrated in

the south of the country. Southern India has been

witnessing revolutionized activity in food retailing. It has

thoroughly experienced the food retailing in various

formats. The reason being that most entrepreneurs who

started organised retail came from southern India and the

cost of real estate in the southern region was less than

other regions (particularly north and west). Since then,

however, organised food retailing has emerged across the

country, inspired by the presence of high potential markets

in the north, west and east as well as the success of some

non-food retailers and food services companies in these

regions.

http://proxy.library.upenn.edu:3012/Insight/ViewContentServlet?contentType=Article&Filename=Published/EmeraldFullTextArticle/Articles/0890360902.html#idb4

The food industry is on a roller coaster ride as Indians

continue to have a feast. Within modern trade, we have

various formats to cater to consumers like The Category

Killer, the Hypermarkets, Mid Sized Store and the

Convenience Store.

Since 2005 India has been topping as one of the most

attractive countries for global retailers. Modern retail,

accounting for 2-3 percent of the market, is expected to

grow at a compounded annual growth rate (CAGR) of 40

percent, from $8 bn. to $22 bn. by 2010. Overall India's retail

sector is expected to grow to $635 bn. by 2015 (Morierty et

al., 2007, p. 9).

There are various factors paving the way to revolutionizing

food retailing in India. Few among them are: Changing life

styles and tastes, growing need for convenience,

increasing disposable income and number of working

women, change in consumption patterns, higher

aspirations among youth, Impact of western lifestyle and

plastic money revolution.



The past 4-5 years have seen increasing activity in food

retailing. Various business houses have joined the Retail

bandwagon. Though the retailers are facing increasingly

demanding customers and intensely competitive rivals,

more investments are flowing in and the share of organised

food sector is growing rapidly. Organised food retailing in

India is surely poised for a takeoff and will provide many

opportunities both to existing players as well as new

entrants.

1.1:2 KEY DEVELOPMENTS IN FOOD RETAIL

There are a number of key developments in the organised

food and grocery retail particularly in the area of attracting

and retaining customers and supply chain management

which are summarized below.

Customer intimacy

Successful retailers are focusing on the importance of

intimacy with the customer – the customer is the greatest

asset that a retailer has, not the store itself. Investments in

display, storage and technology are made with a strong

sense of purpose to enhance the durability of the

connection with the customer.

The micro-strategies adopted by different groups towards

greater customer intimacy are diverse and complex, built

around core themes that promote care for food safety,

freshness, variety and price consciousness. Loyalty

programs have aimed at achieving repeat visitation.

―Quality will ensure that consumers stick to retailers like

glue.‖ Chaddah(2007).

Designated discount day and incentives have been created

with the aim of achieving repeat visit of the consumer.

Points of difference

Food Retailers in India are competing on many planes for

the loyalty of the consumer. ‗Sales‘, ‗specials‘ and ‗lowest

prices across the store‘ are common marketing tools used

by all food retailers, each also strives for a non-price point

of difference based on a combination of service, quality

goods, convenience, range and so on. The consumer

ultimately makes the shopping decision on these variables.

Major Chain retailers offer the convenience of a one-stop

shop for all food and grocery lines and hence their

consumer appeal.

For new entrants like Walmart, Carrerfour, their point of

difference is being a low cost, everyday low cost retail

outlet characterized by a cheaper supply chain and low

store-operating costs.

Convenience retailers offer local convenience in shopping

for immediate necessities or smaller volume shopping

needs without the fuss of a major shopping mission –

though there is aggressive competition from the majors in

this area backed with faster checkouts.

Supply chain management

Over the years, the major chain retailers have adopted

different strategies as to how to manage logistics through

their businesses from point -of -delivery to back of store.

Major retailers in The Indian Retail industry have

announced efforts to take control of the logistics costs

from the supplier‘s factory gate into the back of the retail

store, through respective central warehousing systems.

Future Groups‘ Big Bazaar is one of the first to get on to the

bandwagon. The company is reported to have spent more

than 100 crore on upgrading its supply chain management,

logistics and distribution system. These innovations are

planned to take significant costs out of the value chain –

mostly the costs incurred by suppliers and their

distributors in the delivery of orders direct to store and in

the cartage from supermarket warehouse to store.

Supply dynamics

The nature of product supply is having a major impact on

pricing over time. As noted, pricing is influenced by the

seasonality of availability in fresh product lines, though

major retailers attempt to smooth costs by sourcing from

suppliers capable of delivering year-round supply. This

approach extends to products which are affected by

international trade – suppliers holding large quantities of

commodity lines in times of export downturn may offer

lower prices to move volumes through retail as part of a

promotional program

Corporate Houses getting into organised Food and

Grocery Retail

Corporate houses such as Godrej and Reliance are

already working into food retail. Greater participation

is expected from many other companies as well.

1.1:3 Food Retail is the largest segment of organised retail

in India :

The food and grocery retail sector, which had been a slow

starter, is currently attracting the maximum attention.

"Contrary to the belief that fashion is the largest segment of

organised retail in India, food & beverages is the major

segment." (Economic Times, 2005)

Despite an inherently low-gross margin, low-penetration

rate coupled with the huge market potential – 42.1 per cent

of total consumer shopping basket – (Businessworld, 2004,

p. 85) makes the food and grocery retail sector very

attractive for large business houses. Thus, we have today

mega Indian business houses and corporate like the

Reliance Group of Mukesh Ambani among others making a

foray into this space.



1.1:4 Challenges in Supply Chain Management in Food

Retail :

Diversity of store formats, expansion into new sales

channels, and changing global supply sources are driving

the need for optimal supply chain management. Customer

demands are rising as well: to compete, retailers need to

provide wider choice, better quality, improved service and

convenience — all at lower cost.

Excellent retail supply chain management revolves around

understanding and balancing three key dimensions of

availability, inventory and cost. (Accenture, 2009) Managing

these trade-offs efficiently can result in supply chains that

improve business performance and drive competitive

advantage. Supply chain of most food retailers in India face

challenges like poor transport infrastructure, weather,

environment (Politics), and forecasts are not always

correct: very unlikely the actual demand will exactly equal

forecast demand.

The 2005 report of AT Kearney on retailing states that

most retailers in India still don‘t have a stronghold on

operations –be it supply chain management or

procurement. In the Indian context, a countrywide chain in

food retailing is yet to be established as many supply chain

issues need to be addressed

The food supply chain in India is full of inefficiencies- a

result of inadequate infrastructure, too many middlemen,

complicated laws and an indifferent attitude. (KPMG 2005

report)

Therefore to derive the perfect food retail model for India,

the retailer has to fight issues like fragmented sourcing,

unpredictable availability, unsorted food provisions and

daily fluctuating prices as against consumer expectations

of round the year steady prices, sorted and cleaned food

and fresh stocks at all times.

Against this backdrop, the key imperative facing retailer in

India is that of creating a robust, scalable supply chains

that would facilitate their rapid spread across the country.

―India is a fragmented country and an absence of a strong

infrastructure and logistics system makes it all the more

challenging to reach consumers ( Kaul, 2007)

The World Bank study on Indian Retail (2009) conducted,

says that the Indian logistics cost is one of the highest in the world.

In China the costs is estimated at 10 % of the total value of goods. In

comparison, the cost of logistics in India is 14 % of the total value of

goods.

Besides, India has a high ratio of retailers to consumers,

which means that an individual consumer can choose

between several similar competitors. Median incomes are

not high even for the growing middle class, which

increases price sensitivity and decreases brand loyalty.

Thus Indian food retailers face an uphill task of

differentiation in a highly price sensitive market.

Majority of the Retailers are trying to impress their

customers by offering goods at the cheapest rate over their

competitors, further they are unable to sustain critical mass

of sales volumes due to inefficiencies in supply chain

management resulting in un-viability of business.

Continuing on the same note, today the retailers are

readjusting the pace of their business keeping their supply

chain performance and capabilities in mind.

The Indian retail market is estimated at US$ 400 billion

which is serviced through 12 million retail outlets with over

96 per cent of them smaller than 500 sq. feet. Recent

published figures of Retail Market in India is US 400$billion

of which 6% or US24 $Billion is in organised retail. (Sinha,

2010 cited from www.economictimes.com)

This is in line with forecasting of KSA Technopak, a retail

consulting and research agency, which had predicted that

by 2010, organised retailing in India will cross the US$ 21.5

billion mark. (KSA Technopak India Retail Report, 2005)

Efficient Supply Chain, Efficiency measuring practices,

Usage of Technology and Logistics management is the key

driver for the success and growth of organised retailing.

The retailers are attempting to benchmark few key

parameters like inventory turn around, availability of SKUs

with the prevailing international norms to identify gaps for

growth and sustainability of organised and modern retail in

India.

This research is focused on understanding the current

practices in the organised food and grocery retail with

particular emphasis on identifying the areas that are

contributing to the customer satisfaction and postulating a

predictive model which can help retailers in improving their

overall operations

1.2. Purpose of Study :

No similar research initiative has been undertaken in India

that has focused on retail competitiveness and consumer

satisfaction through improved logistics, use of technology

for scheduling and optimizing inventory while ensuring no

stock outs.

The wastage levels for perishables are as high as 40

percent because of a large number of intermediaries, loss

during transportation, unpredictable demand forecast and

inadequate storage facilities. Therefore there is an urgent

need to look at a holistic picture of supply chain and

logistics.

In India Organised Retail is in its nascent stage hence there

is not enough literature available on efficiency measuring

mechanism in different format of organised food retail in

India. Therefore there is a need to study variation in the

efficiency practices in different formats.

1.3 Problems and Issues :

Organised retail in India is still in nascent stage and there

are no well developed relevant models in use and the

supply chain is being managed sub-optimally. (Anand et.al,

2006)

The 2005 A T Kearney report on retailing mentions that

most retailers in India still do not have a stronghold on

operations. Therefore there is an urgent need to look at a

holistic picture of supply chain and develop an integrated

model that will work for retailers in India.

While Managers in the food retail sector are trying to get

consumer feedback, questions asked are mostly on the

service provided and behavioural aspects of staff rather

than on availability of stocks, freshness, pricing etc. Thus

the feedback cannot be used in any meaningful way to

tailor supply chain in value creation for customers.

1.4 The study is specific to Food and Grocery retail :

According to Euromonitor International's research, more

than 90% of Indian consumers' retail food expenditure is

spent on fresh food categories, with sales largely driven by

fruit and vegetables.

Retail volume of fresh food hit 174 million tonnes in 2007,

representing impressive volume growth of 8.1% on the

previous year, much faster than the country's population

growth rate of 1.5%. Among the most influential factors are

rapid economic and personal income growth, expansion of

retail outlets, particularly in the cities, and scientific

advancement in improving production yields. These growth

drivers will become even more pronounced in the future, so

Indian consumers will continue to spend more per capita on

fresh food. Furthermore, it is estimated that there will be

130 million new consumers in India by 2015, according to

Euromonitor International's Countries and Consumers

database.

Food, beverages account for as much as 71 % of retail

sales in 2002.The spoilage rate is extremely high for

produce going up to 35 % of the total inventory.

The food and grocery market in India is the sixth largest

grocery market in the world. It is expected to grow to $482

billion in 2020, with an overall growth rate of 104 %

1.5. Defining Variables for Study :

Independent: Stock Availability, Stock Display, Total Supply

Chain, Technology and Outsourcing logistics

Dependent: Customer Satisfaction

1.5:1 Operational Definition of Variables

1. Customer Satisfaction: Customer satisfaction is a

measure of how products and services supplied by a

company meet or surpass customer expectation. It is

seen as a key performance indicator within business.

2. Stock Availability: Products that have to be sold are

at hand or available when needed. Product

availability, defined as the probability of having a

product in stock when a customer order arrives

(Chopra and Meindl, 2007, p. 77), is one of the key

performance

3. Stock Display: Products meant to be sold are shown

to the consumer for sale

4. Supply Chain Total: it is the integration of key

business processes like Stock Availability and Stock

Display across the Supply Chain for the purpose of

adding value for customers and

stakeholders.(Lambert,2008)

5. Outsourcing logistics: Utilization of external

organizations to execute logistics activities that have

traditionally been performed by the organization

itself.

CHAPTER 2

LITERATURE REVIEW

Table of Content

No. Title Page No.

2 Literature Review 22

2.1 Consumer Value And Consumer Satisfaction

23

2.2 Freshness 30

2.3 Emphasis on the relevance of Housekeeping

31

2.4 Food Pricing 35

2.5 Redressing Consumer Complaint 37

2.6 Supply Chain 39

2.7 On Shelf availability & Out of Stock 44

2.8 Shelf Space Utilization 51

2.9 Technology in Retail 58

2.10 Efficiency Measurement Mechanism 64

2.11 Logistics 65

2.12 Manpower Utilization 67

2.13 Gaps in Literature Review 70

2. LITERATURE REVIEW :

The Indian Retail sector has caught the world‘s imagination

in the last few years. Topping the list of most attractive

retail destination for the last three years on a trot, it has

managed to attract global retail giants to scout for potential

partners who are waiting to enter the fray.

India‘s retail growth was largely driven by increasing

disposable incomes, favourable demographics, changing

lifestyles, growth of the middleclass segment and a high

potential for penetration into urban and rural markets.

Against this background, in the present modern retail

environment that appears to be transforming the retail

landscape, retailers must deal with increased competition.

Changes in customer expectations about product

assortments and service, and business demands drive

efforts to deliver improved business performance and

customer satisfaction. As a result retailers look beyond

their organizational boundaries to evaluate and integrate

the resources and capabilities of their suppliers and

customers and thus create superior value and a competitive

advantage that they might sustain over time.

But what needs to be kept in mind is that, Retailing in India

will not succeed with cut and paste global formats, and in order to

succeed, retailers need a good understanding of the differences in

value perception of Indian consumers when compared to the rest of

the global market (McKinsey Quarterly, 2008).

Keeping in view the above scenario, modern retail in India

and objectives of this research study , the researcher

reviewed the literature on consumer value perception,

supply chain management, importance of On shelf

availability of products, use of technology , logistics etc.

The relevant literature on all these aspects of retailing is

given below.

2.1 Consumer Value And Consumer Satisfaction :

Over the last couple of years the Indian food and grocery

retailers have started to develop a different outlook towards

consumers. Food and Grocery organised retailer‘s

recognition that ―Customer is king‖ led to the beginning of

the customer driven movement. It would be appropriate to

say that Customer driven thinking is the ―the new mantra‖.

It (Customer satisfaction) is viewed as a measure of the

size, loyalty, and the quality of the customer base of a firm

(Fornell et al. 2006; Morgan and Rego 2006). It is also

viewed as a measure of a retailer‘s economic health (Fornell

et al. 1996). Therefore it is not surprising that firms have

invested considerable resources in measuring customer

satisfaction.

Customer‘s Store satisfaction can be defined (Engel et al.,

1990, p. 481) as: The outcome of the subjective

evaluation, that the chosen alternative (the store) meets or

exceeds expectations. This definition is within the tradition

of conceptualizations of satisfaction that are used in the

literature.

Satisfaction is a consumer‘s post-purchase evaluation of

the overall service experience. It is an affective reaction

(Menon and Dubé, 2000) in which the consumer‘s needs,

desires and expectations during the course of the service

experience have been met or exceeded (Lovelock, 2001).

The literature of marketing in general and of retailing in

particular, leaves no doubt about the central role of

customer satisfaction. Anderson et al (1994) and many

others opine that customer satisfaction impacts the

retailer‘s fortunes via customer retention and loyalty, and

hence ultimately via long term profits. Satisfied customers

buy more products, are less price sensitive and will be

more attentive to communications of the company and

hence more insulated from competitive encroachment (Blat

berg et al, 2001 and Oliver, 1997). Holbrook, 1994 was of the

view that obtaining customer satisfaction is fundamental

and essential in all exchange transactions. Meeting

consumer needs increases consumer satisfaction (Porter,

1985).

Superior value to consumers was established as one of the

most successful business strategies (Ravald and

Gronroos). Continuing on the same note, Woodruff (1997)

opined `that Consumer value as the next major source of

competitive advantage. In order to ensure that the customer

is satisfied with the shopping experience the Indian Food

and grocery retailers are leaving no stone unturned to offer

them value and variety.

Hence, one should treat customer satisfaction as an

intermediate product in the retailer‘s quest for profitability.

According to Chaddah and Srivastava (2010) “satisfied

customers not only enhance retail customer retention in

grocery retail but also increase new customers through

word of mouth.”

Further, in a competitive marketplace where businesses

compete for customers, customer satisfaction is seen as a

key differentiator and has increasingly become a key

element of business strategy.

Consumer Satisfaction has often been regarded as an

antecedent of store loyalty (Bitner, 1990). Therefore, one of

the primary concerns in retailing is the production of

customer satisfaction as part of the process of building

customer equity (Blattberg et al, 2001) and profit.

Further, the importance of understanding consumer

behavior has never been more important to retailers.

Consumer research once was a task left to manufacturers

of consumer packaged goods, retailers have embraced this

responsibility, spending on research, and trying to

understand, and influence consumer behavior. (Grewal. et

al, 2009)

But, according to KPMG‘s (2010) survey, though attracting

the customer was one of the top concerns of the retailers

investment in consumer research was not amongst their

top priorities.

KPMG (2010) Retailers should recognize that consumer is

the king and cannot be ignored. The true metric of success

may not be in terms of number of new stores added by a

company, rather increase in the same store sales through a

thorough understanding of consumer requirements.

It is recognized that greater understanding of customers

can enhance customer satisfaction and retail performance

(Grewal et. al,2009)

―Awareness of customer needs and satisfaction levels are

going to be the key to customer retention and loyalty

against increased competition.‖ According to Dr. Martha

Russell, President of Clickin Research.

But in many case retailers are not aware of what their

customer expect. Hence they are unable to deliver the right

value to the right customer and satisfy them .Especially in

this competitive scenario where the customer are well

informed, commanding and demanding at the same time it

has become imperative for the organization to be updated

on the ―WHAT‖,‖WHY‖and ―HOW‖ of each and every

customer. This calls for empathizing with the customer by

indulging into their priorities and decision making.

The food retail industry is almost entirely consumer-driven.

In addition to Peter Drucker‘s ―the creation of value and

wealth for consumers‖ theory, recent study of consumer

value and satisfaction has gained utmost importance

among researchers and practitioners (Cronin et al., 2000,

Holbrook, 1999), If the retailers understand what the

consumers are looking out for it would aid the formulation

of important strategic decisions (Tellis and Gaeth, 1990). In

the same vein Zeithaml 1988 theory of assessing

consumer‘s purchase intention is a relevant research in the

same direction

In food and grocery retail customer information provides

insight into their needs. Knowledge of customer demand

can lead to better planning practices and lead times could

also be shortened. The more information a company has

about a customer, the less the uncertainty in the supply

chain. The power of supply chain management lies in

supply chain integration. The integration of the customer

into the supply chain improves the information flow all

along the supply chain as stipulated by Fredendall, et-al.

(2001).

The further away the members in the supply chain are from

the end user, the less they know about the needs of the

customer. The less information the supply chain members

have about the customer‘s needs, the higher the level of

uncertainty in the supply chain and the more difficult the

planning process.

Availability of customer information could also lead to cost

reductions as fewer inventories would be held and the

product would also be available much faster to the

customer (Fredendall, et-al. 2001).

Value conscious Indian consumers, with a very low degree

of consumer loyalty (McKinsey, 2008), could pose a

challenge or even serious threat to the future growth of

incumbent firms if their needs are not met. Companies that

ultimately understand the Indian consumer will be the ones

to last out in the end (Indian Retail News, 2009).

Literature review on some of the other areas like Freshness,

Housekeeping, Pricing and redressing consumer complaint

which are pertinent for consumer perception about the

retail outlet is summarized below

2.2 Freshness :

Freshness is an important guarantee of product safety.

Freshness is highly valued and is regarded as the single

most important element influencing the taste and quality of

the meal. (I V trung, et al)

Freshness is a decisive attribute for the consumer choice of

fruits and vegetables (Pe‘neau et al., 2006). A large number

of aspects are likely to be involved in consumer

perceptions of the freshness of a food product. (FDA, 2000)

The quality and freshness of perishable food items has

special importance to Asian consumers and perception of

the level of retail outputs (Safety, quality and freshness) of

retail outlets were found to be overwhelming determinants

of retail format choice. (Trung et.al, 2010).

Similarly, the description of freshness is especially

influenced by the place where consumers obtained most of

their fruits and vegetables. (Vannoppen et al., 2002).

In addition consumers may have more trust in the quality,

safety, freshness and origin of goods sold at organised

retail outlets (Trung et al, 2010)

Product quality and product features were considered the

most important product choice criteria in a study of grocery

customers (Baltas and Papastathopoulou, 2003). Quality is

seen as ―a satisfaction-maintaining factor in the

supermarket sector‖ in that improvements in quality have a

small positive impact on satisfaction while reductions in

quality of the same magnitude have a significantly greater

chance of reducing satisfaction (Gomez et al., 2004, p. 273).

2.3 Emphasis on the relevance of Housekeeping :

Mazursky and Jacoby (1986) discovered that the

merchandise-related aspects (quality, price, and

assortment), service-related aspects (quality in general and

salespeople service), and pleasantness of shopping at the

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store are among the most critical components of store

image attributes.

Housekeeping is the area that has received significant

attention and can be described as relating to factors in the

store environment that can be designed in order to create

certain emotional and behavioral responses in the

consumer (Kotler, 1973).

It has been shown that a positive and clean atmosphere

can lead to approach behaviours, which implies that

consumers stay longer in the store, spends more money or

that the propensity for impulse buying increases (Donovan

and Rossiter, 1982). Some even relate atmospherics and

housekeeping to the possibility of creating long-lasting

consumer relationships (Babin and Attaway, 2000).

Underestimating the importance of the shopping

experiences within a retail store, retailers in the past

preferred to entice consumers into their stores by

announcing sales incentives (Kotler, 1973–1974). However,

retailers have come to realize the importance of

environmental cues and have tried to develop effective

retail store atmospherics and are paying attention in order

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to attract their target customers and increase their

profitability (Sirgy et al., 2000).

Turley and Milliman (2000) asserted that marketing

researchers have come to realize that the physical store

environment experienced at the point of purchase

influences consumers‘ shopping behaviour and, therefore,

the practice of creating influential atmospheres should be

an important marketing strategy for most exchange

environments

An organised and clean store , for example, been shown

to improve consumers‘ mood which in turn can lead to

making the experience of the store visit more positive.

(Spies et al., 1997) An unclean and negative atmosphere, it

is argued, may however lead to avoidance behaviour, such

as a desire to leave the store or a sense of dissatisfaction

(Donovan and Rossiter, 1982; Turley and Milliman, 2000).

―The look of the store and the way the food items are

displayed acts as a facilitator‖ (Chaddah,2009)

A growing body of academic research also supports the

importance of store environment as a marketing tool to

affect shoppers‘ approach behaviours (Fiore et al., 2000) as







well as a dominant market differentiator (Reardon et al.,

1995; Roy and Tai, 2003). Thus, effectively managing the

retail store environment encountered by customers has

been identified as a viable retail management tactic (Babin

and Darden, 1995; Gilboa and Fafaeli, 2003) and has gained

a growing amount of attention from both industry and

academia (Smith and Burns, 1996). Schlosser (1998) noted

that, in the face of increased market competition, retailers‘

sole reliance on promotional techniques is inadequate;

retailers‘ efforts must turn from offering just price

promotions to creating a pleasant shopping experience.

Researchers also asserted that store environments can

influence consumers‘ willingness to purchase or entice

them to stay in the store for a longer period of time

(McDougall and Fry, 1974–75; Mano, 1999). According to

Chain Store Age, retailers reported a positive connection

between improving the retail store atmosphere and

increasing sales (―Store atmospherics,‖ 2005).

As consumers often infer retail store images from such

environmental cues (Bloemer and Ruyter, 1998), the store

environment may represent the most imperative channel















through which retailers can communicate with their

consumers.

2.4 Food Pricing :

Towill (2005) considers price important for ―commodities‖

such as food. Price was a significant factor in retail outlet

choice (Maruyama&Trung, 2007). Shopping outlets are

significantly different in terms of general price levels for

products. It is well documented that a lower and stable

price in the form of general price levels accelerates retail

purchases. (Tigert, 1983)

Retailers usually use various instruments of pricing and

promotion policy to attract new customers and increase

customer loyalty. However, satisfaction with retail prices is

seldom investigated, although price perception has a

significant impact on satisfaction (Voss et al., 1998; Varki

and Colgate, 2001; Iyer and Evanschitzky, 2006), which is

known as an important predictor of retail sales performance

(Gómez et al., 2004) and store loyalty (Grace and O‘Cass,

2005).

It is important to consider that price is not the only means

by which retail outlets compete. Consumers consider a

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range of factors when purchasing food and grocery

products. These include product range and quality,

convenience of locating products, location of the retail

outlet, queuing time, opening hours and access to car

parking.

For mid size and large stores, price plays an important part

in this mix However, smaller stores often compete on the

basis of convenience, with many consumers prepared to

pay higher prices for hassle-free shopping.

Consumers increasingly have the opportunity to weigh a

range of price and convenience factors when deciding the

type of food products they purchase and the retail outlet

from which those products are bought. But one common

threads that runs across all the different format of retail

outlets is customer satisfaction.

Price, specifically in-store promotions and discounts, play

an important role in decreasing the strength of brand

loyalty (Walters, 1991; Wedel et al., 1995; Agrawal, 1996), or

in increasing the strength of store loyalty (Little and

Shapiro, 1980)







2.5 Redressing Consumer Complain :

Complaint behaviour is referred to as dissatisfaction

response and finally feedback to the supplier (Bettencourt,

1997; Soderlund, 1998).

According to Ken Lehman, Chairman of Winning workplace

(1997), Retailers do not pay as much attention to consumer

complains as they used to. He says, Statistics back up this

claim-consumer complaint against retail stores grew by

104% in a 3 year period.

According to Purdue University‘s centre for customer

driven quality, nearly 70 percent of the business leaders

polled tabbed customer service as the most important

factor in building satisfaction and loyalty.

Further, the summary of empirical articles indicates four

key consequences of redressing complaint. They are

satisfaction, word of mouth, repurchase, and attitude to the

company.Davidow (2003)

Competition with traditional retail.

It is important to know how the traditional retail is operating

as they are the main competitors to the organised retail. In

this regard the following information gives useful insight

Indian consumers trust items being fresh and reasonably

priced at the friendly neighborhood kirana store. Further,

even though unorganised food and grocery shops are

lacking in the modern service scope but as ―retailing is very

culture specific they (unorganised retailers) still hold a

favorable position in the market.‖ www.docstoc.com

According to Nielsen Shopper Trends (India), traditional

grocery stores continue to dominate the Indian retail scene

and are frequented more often by Indian shoppers.

According to this study, 39 percent of grocery buyers they

interviewed had visited a Supermarket/Hypermarket at least

once in four weeks, 97 percent of them visited a Traditional

store over the same period. Further. The survey also found

that shoppers do not explicitly state promotions as a factor

that influences their store choice. However, it is observed

that attractive and interesting promotions play a vital role in

store selection. Shoppers claiming to have checked the

newspaper or flyers for coupons and then having gone to

the store with attractive deals has increased over the years.

Another issue of Consumer advocacy or consumer

recommendation was reviewed. According to Retailer

Brand Survey published by Kurt Salmon Associates,

consumer recommendation is directly linked to top-line

performance of retailer. While other factors certainly come

into play, the relationship between movement in advocacy

and same-store sales growth is statistically significant.

2.6 Supply Chain :

The term supply chain is described by Lummus and

Vokurka (1999) as ―all of those activities associated with

moving goods from raw materials stage through to the

consumer. This includes procurement, production

scheduling, and order processing, inventory control,

transportation, warehousing, and customer service. The

information systems necessary to monitor all of these

activities are also included. All these activities are then

integrated and coordinated into a seamless process to

involve all the partners in the supply chain‖.

According to Fredendall and Mill (2001) ―supply chain

management represents a significant change in the way

that organizations view themselves‖.

Stank et al. (2005, p. 27) describe supply chain management

as a ―strategic level concept.‖ Ho et al. (2002) conceptualize

SCM as having three core elements:

1. Value creation

2. Integration of key business processes

3. Collaboration.

Based on this conceptualization, they define supply chain

management (SCM) as follows:

SCM is the philosophy of management that involves the

management and integration of a set of selected key

business processes from end user through original

suppliers, that provides products, services, and information

that add value for customers and other stakeholders

through the collaborative efforts of supply chain members

(Ho et al., 2002).

Persson (1997) in her study opined that supply chain

management is a homogeneous management concept. The

overall objective of SCM is to contribute to the

improvements in the company’s bottom-line and

profitability.

Related objectives include reducing the costs mainly by

reducing the inventory levels and increasing the revenues

by improving customer service through co-ordination and

integration along the material flow, win -win relationships

and end customer focus.

The concept of supply chain management is becoming

more and more predominant in offering a solution to keep

costs to a minimum and to offer an acceptable level of

customer service (Southern, 1997: 220). Creating a

seamless operation from the point of origin to the point of

consumption is the main aim of supply chain management

(Anon, 2000).

Christopher (1992: 25) also stipulates, the importance of

customer service in supply chain total functioning must

therefore always be considered in a supply chain system

design. The integration of the customer in the supply chain

would lead to shorter response times and reductions in the

time spent on the development of products, which would

improve customer service. Gruen and Corsten (2003)

In a paper presented, Chaddah and Srivastava (2009)

opined that ―Inefficiencies in Supply Chain in India causes

Sub-optimal stock which results either in loss of sales

volumes or increase in food and grocery retailers cost.”

Corsten and Gruen (2003) indicated that most Out of stock

(OOS) situations occur at the store level, primarily through

ordering and replenishment practices within the store.

Hence, a higher service level may require more and better

trained staff within store.

Increasingly, firms are adopting supply chain

management(SCM) to improve competitiveness

(Gunasekaran et al., 2008).The major forces behind this

development are increasing competitive pressure and a

belief that working cooperatively in supply chains can

create a competitive advantage.

In recent years, a growing amount of research has been

dedicated to investigating maturity model development and

performance measurements for the strategic management

of supply chain processes (Gunasekaran et al., 2001).

Higher levels of maturity in any business process result in:

better control of results; improved forecasting of goals,

costs and performance; greater effectiveness in reaching

defined goals. The concept of process maturity, including

supply chain processes, derives from the understanding

that processes have life cycles or developmental stages

that can be clearly defined, managed, measured and

controlled throughout time.

Kevin McCormack‘s Five Stages of Supply Chain Maturity

show the progression of activities toward effective supply

chain integration. These stages are: Ad Hoc, defined,

linked, Integrated and extended. This model only mentions

the evolution of the five stages of supply chain maturity but

does not relate it with customer satisfaction or any other

business aspect. Likewise Morash and Clinton (1998)

investigated the creation of customer value through the supply

chain integration alternatives of collaborative closeness

and operational excellence.

―Organised food and grocery retailing chains going

national requires significant investments. Retailing within

this sector is not just about the front end, but involves

complex supply chain and logistics issues as well.‖ Says

Arvind Singhal, Chairman KSA Technopak.

Most retailers have already started exploring the

opportunity to develop their own supply chains that would

suit their needs precisely. Replicating the success stories

of the big names of the Western nations may still be distant

dream for Indian food and grocery retailers, but at least the

winds are blowing in the direction of growth.

2.7 On -Shelf Availability and Out Of Stock :

On-shelf availability (OSA) of products in a retail store is an

important business criterion in the fast moving consumer

goods and retail sectors (Fernie and Sparks 2004) and is the

customer service output of a successful supply chain

system (Grant et al. 2006a); in other words ―if a product

isn‘t on the store shelf then you can‘t sell it…!‖ (Trautrims

2002)

Most researchers postulate that satisfaction is an

antecedent of loyalty. Indeed, customers who positively

evaluate the store keep visiting it. Even if satisfaction alone

does not explain loyalty, it remains nevertheless a

necessary stage in the formation and perpetuation of

loyalty. Further, shoppers who experience stock-outs leave

the store with a lower store image and less satisfaction,

measured on several scales (Zinszer et.al, 1981).

Out –of- Stock (OOS) can be defined as: ―a product not

found in the desired form, flavor or size, not found in

saleable condition, or not shelved in the expected location‖

(Efficient Consumer Response – ECR Europe, 2003).

European grocery shoppers rate OOS as the third most

important issue after shorter queues and more promotions

(ECR Europe, 2003)

An OOS represents a situation where a product is not

available when a customer order arrives. Product

availability, defined as the probability of having a product in

stock when a customer order arrives (Chopra et.al, 2007), is

one of the key performance measures of the retailer.

Customer satisfaction for retail consumers is manifested by

product On Shelf Availability. Corsten and Gruen (2003)

argued that the ―availability of products is the new

battleground in the fast moving consumer goods and

grocery retail.‖

When products are on the shelves, customers get better

service, supermarkets increase Profitability. The ability of a

store to provide a wide range of assortments and variety is

one of the critical factors to producing customer

satisfaction. However, larger the range, greater is the

chance that at some point of time, the store will suffer an

out-of-stock for some brand variant ( Bucklin, 1972).

Studies to date show that out of stock (OOS) can result in

substantial revenue losses for retailers. This is because of

the unwarranted assumption of product availability; many

retailers can face OOS costs in consumer markets. OOS

costs are predominantly influenced by retailers' stocking

decisions as well as store practices and conflicts in the

supply chain (Corsten and Gruen, 2003).

In the OOS situation, food and grocery retailers generally

order more than they need as a first response, thus

increasing inventory costs. However, the magnitude of

losses caused by OOS depends predominantly on

consumer responses to the OOS.


Grocery stores in the USA lose $6 billion in sales per year,

$200,000 per average supermarket, due to out-of-stock

products in the top 25 grocery categories (Stadler, 2002).

Approximately, £2.5 billion a year in the UK is lost because

a product is not on the shelf when a customer is looking to

buy it (Rowat, 2006). In India, figures pertaining to losses

due to unavailability of stock are unavailable.

The issue of optimal product or service assortment and the

associated stocking decision is perhaps most directly

affected by consumer reaction to stock outs. Trade-offs

must be made between the breadth of product assortment

and the firm's ability to maintain adequate levels of

inventory for each of the products and brands the retailer

decides to carry. Thayer (1989) suggests that it may in fact

be this increased financial pressure, and the resultant

inventory management techniques, which is responsible for

the generally increasing levels of stock outs.

Emmelhainz et al‘s (1991) research result show, for

instance that a stock out can make a retailer face the loss of

up to 14 % of the buyers of the missing product. This

revenue loss not only stems from lost product sales during



OOS period, but can also extend to later periods or other

product categories.

Unavailability of a specific brand in the retail store is

unexpected and often has a negative influence on

consumers' expectations and thus satisfaction, (Kucuk,

2008)

There are 5 things that can happen when a customer is

faced with an out of stock (OOS) item, notes University of

Colorado Professor Tom Gruen (2003). From the retailers

perspective, The world wide responses are ― Do not

purchase,9% Purchase elsewhere,31% Substitute with the

same brand,19% Substitute with a different brand,26%

Delay the purchase,15%.

To elucidate it further, the continuous occurrence of OOS

increases the likelihood of consumers switching brands or

stores depending on the level of consumer's brand and

store loyalty. In this context, many industry studies point

out that acquiring new consumer is less costly than re-

gaining consumers.

Because of the OOS, retailers might also face retention

costs of switching consumers in addition to the high-

inventory cost of precautionary stocking decisions

regarding the frequently OOS item.

In other words, OOS costs are generally hidden costs in

many situations and are often difficult to detect by

companies. It can be very costly if the OOS situation is

frequently or constantly occurring for a company,

especially when one considers the risk of the total loss of

loyal consumers. (Kucuk, 2008)

In the Indian Context, the retail scenario is full of

challenges. An extremely disjointed system and limited

infrastructure create significant challenges for supermarket

chains. Infrastructure and transportation problems in India

also force the supermarkets to carry inventory stock for 45

days, compared to 14 days in Thailand and one to two days

in Europe.

From reviewing the literature, the researcher found that

many retailers view the daily replenishment from back store

inventory to be a task to be done in-between other tasks.

Literature review does not indicate major differences

between the stores. But what seems to discriminate the

stores is the attention or focus on this task, where some of

the better performing stores indicate a better managerial

commitment towards replenishment (Aastrup et. al, 2008)

Internationally common weapon in fighting the war against

out-of-stocks is an automated replenishment system. The

new software gathers point-of-sale (POS) data, warehouse

inventory levels and analyzes sales and movement over

previous timeframes to electronically generate forecasts

and replenishment orders and establish perpetual

inventories. Internationally, Wal-Mart pioneered automated

replenishment for its food departments and grocery chains

such as Shop-Rite currently use the tool. (www.the

freelibrary.com)

To overcome the problem of Out –of- stock ,Nestle, Colgate

Palmolive, Hindustan Unilever Lever, J&J and six other

major suppliers joined forces with Food World, India's

leading food retailer and began sharing non-competitive

information, transportation systems and resources to

drastically improve service and create savings (Kamath,

2002).

http://encyclopedia2.thefreedictionary.com/POS

http://encyclopedia2.thefreedictionary.com/POS




Out-of-stocks of many items, in addition to affecting own

sales, significantly affect the sales of the entire set of

remaining items in the category. (Boatwright et. al, 2007)

Internationally, In an effort to lower the stock out rates and

recover lost sales, grocers and manufacturers are

deploying collaboration and forecasting tools and data

analysis that use real-time data to monitor stock levels and

keep stores filled with the right products for visiting

consumers.

2.8Shelf Space Utilization :

Product variety influences a customer‘s perception of a

store (van Herpen and Pieters, 2002). In turn, perceptions

concerning product variety influence both satisfaction and

store choice (Hoch et al., 1999). This explains the reason

why the availability of a wide variety of products is ranked

higher as a store patronage attribute. Continuing on the

same note, Arnold et al., (1983) opined that Supermarket

shoppers ranked product variety third behind location and

price as determinants of store patronage.

Paulins and Geistfeld (2003) echoed the same opinion and

concluded that when a store had an appealing merchandise

selection; it became a key reason why that store was

considered desirable.

Within a given trade area, studies emphasize the

‗uniqueness /depth of assortment‘ as a way of influencing

store loyalty and patronage. In consumer priorities,

assortment and variety comes after convenience and price

(Louviere and Gaeth, 1987).

Given that consumers are favorably inclined to revisit the

store where they have had positive shopping experiences

and found something they could not find anywhere else, it

is suggested that competing stores need to differentiate

themselves based on type and quality of assortment

offered. The emphasis here is on tailoring the

environmental clues using retail mix elements to foster

patronizing shopping experience and merchandise.

With the number of brand lines continually increasing,

allocating products on the store shelf in the best possible

arrangement poses a great challenge to the industry.

Assortment depth (or selection) influences consumer store

choice; significant inventory investment and subsequent

allocation of display area by retailers are needed to

accommodate these preferences (Kahn and McAlister

1997).

Broniarczyk, Hoyer, and McAlister (1998) show that

consumers' perceptions of assortment can be unaffected

when certain low-preference items are eliminated and shelf

space is held constant. Thus the number of stock keeping

units in a category may be trimmed without affecting

assortment perceptions and, presumably, satisfaction with

the decision experience.

Further, modern retail grocery store formats with their shelf

service nature place a great deal of importance on the shelf

position of a product in terms of success or failure.

Food and beverage retailing practices have placed

increasing emphasis on shelf management. While price is a

major economic factor influencing sales of individual

products, other non price factors such as number of

shelves and their height are parameters to the sales of

product. (Folwell et.al, 1993)

Shelf space is often the retailers’ scarcest resource. ―The

shelf is the location where any product meets the

consumer, and the shelf is also the final inventory location

in the retail supply chain.‖(Nogales et al, 2004) They further

elaborate, ―The shelves of a retail outlet is like a ‗silent

sales man‘, that is, it is in such a way that inspiring the

customer to take product from the shelf and finally

purchase it.‖

―Retail shelf space management is the core of retail

operations management decision support systems (DSS),

requiring a high volume of data related to marketing and

space configurations‖ (Lim et al., 2002).

Space allocation decision is very important in retail

operations and management. Considering the organization

and environmental factors retail firm encounters, the

management determines the strategy for space

management of the store. Once the decision of space

management strategy is been made, an appropriate

allocation model is adopted in the shelf space operation

and possibly affects the resulted performance. (Yang et al,

1999)

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Managing shelf space well can not only decrease inventory

level but also have stronger vendor relationship and higher

customer satisfaction as well. The decision of shelf space

allocation and management is therefore a critical issue in

retail operations management. (Yang et al, 1999)

The problem of space allocation and deciding on the

number of units to be displayed is so complex that most

retailers do not have enough knowledge to make

appropriate decision.

Shelf on which products are being displayed is one of the

major resources in retail environment. Accordingly, shelf

management has been considered as an important decision

to retailers. Retailers will not only increase their profit but

also decrease cost by managing shelf well. Increasing sales

by attracting the consumer‘s attention and encouraging

consumers to have additional purchase opportunities can

be implemented by proper management of shelf space

allocation and products display (location of the product

within a display, product adjancies, aesthetic elements,etc)

(Hwang et.al,1999)

Shelf space problem arises when retailer has a large

number of products to display on limited shelf space

available at disposal. ―Retailers realise that they may lose

sales if they do not assign the necessary space to brands,

which also help to enhance store image.‖ (Nogales et. al,

2004)

Consumers expect a certain variety within store and

retailers must give at least a small display to every product

in a category (Gruen, Corsten, 2003). Increasing number of

products, high land cost and stiff competition have posed a

challenge to the retailer for efficient allocation of available

shelf space, which is often retailer‘s critical resource. The

size of display also strongly influences the number of sales.

The more shelf space allocated to a product, the more it is

recognized and sold. (Corsten and Gruen, 2003)

Hwang et al(1999) made a series of field experiments and

found that location of the product within a display,

especially the level of shelf on which the product is

displayed in case of multi-level shelf, has a significant

effect on sales.

Shelf space management recognizes the interrelatedness of

products in the category and focuses on improving

performance of whole product category rather than the

performance of individual brands.

Shelf space allocation affects store profitability. Retailers

are increasingly looking regarding how to stock shelves for

maximum profitability, while improving the shopping

experience for their customers. Understanding shelf space

availability, along with consumer demand, allows retailers

to develop a replenishment strategy to avoid excess

inventory and plan for a rise in the purchasing of a product

based on season or promotions. (Blog: renjitrh sethyram:

retrial in Kerala :)

To conclude, the impact of displayed inventory level of a

product on retail sales is well established in the marketing

and operations management literature (Chung, 2003). A

major outcome of these studies is that demand of a product

is not an exogenous parameter, but is influenced by the

displayed inventory level maintained by the retailer.

2.9 Technology in Retail :

A study of successful retailers reveals that the business

ability to build and defend a competitive position in the

market depends to a great extent on the capacity to invest

and use information (Weber and Kantamneni, 2002). In this

regard, Buxmann and Gebauer (1999) consider information

technology to be a key factor for the organization's

success.

The literature considers information technologies to be an

important source of competitive advantages for the

company. Among the benefits derived from IT solutions for

the retailer, the literature mentions the following: time

savings, lower personnel costs, reliability, accuracy, error

reductions as well as increased productivity through the

mechanization of labour-intensive tasks.

Further, generalized use of IT has involved a deep change

in an increasing number of business areas, with planning

and ordering ,order follow up, stock management as some

of the areas that has benefited most (Gil et al., 2007).

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In sum, IT solutions for planning and ordering, stock

management and follow ups generate efficiency

improvements in the internal processes. This progress will

affect positively end consumer experience (Gurau and

Ranchhod, 2002; leading to higher satisfaction levels

(Bitner et al., 2002) .

In the marketing services literature little attention has been

given to customer satisfaction with service improvements

(Timmor and Rymon, 2007). Since technology can enable

increased levels of service through greater customization

and flexibility (Bitner et al., 2002), the researcher expects

customer satisfaction to be positively affected by service

improvements reached, due to the technological solutions

implemented by retailers.

While retailers have expanded their markets and operate

stores in multiple locations, planning and ordering of

goods, controlling merchandising and store operations has

become more difficult. During the last couple of years, the

food and grocery retail has been experiencing a number of

changes associated with supply chain and customer






interface management and the retailers have examined the

ways in which computers can improve the efficiency of

their operations and reduce costs (Al-Sudairy and Tang,

1998).

The technologies that Indian retailers have deployed over

the years to serve their distributed networks are without

standards. (KPMG, 2010).Further, most organised players

have managed to put the front ends in place, but these are

relatively easy to copy. The relatively complicated

information systems and underlying technologies are in the

process of being established.

It is widely felt that the key differentiator between the

successful and not so successful retailer is primarily in the

area of technology. Going forward technology is likely to be

a key differentiator to bring about efficiencies, save on

costs and offer better services to customer. The problem

with old technology is that there are no standards and in

many instances one does not integrate with the other.

(KPMG, 2010)

Simultaneously, it will be technology that will help the

organised retailer score over unorganised players, giving

both cost and service advantage. According to Khan

& Manopichetwattana (1989) ―technology-consuming" firms

are distinguished from others by: greater profitability.

Retailing is Technology Intensive. The emergence of new

information Technologies such as standard barcodes,

scanning technologies, computerized inventory control and

replenishment system and electronic data interchange has

eliminated some manual store tasks and has contributed to

an increase in retail productivity.

The focus of the retailing sector today is to develop the link

with the consumer. ‗Data Warehousing‘ is an established

concept in the advanced nations. With the help of ‗database

retailing‘, information on existing and potential customers

is tracked. Besides knowing what was purchased and by

whom, information on softer issues such as demographics

is captured.

Technology can be used to be effectively design and

implement loyalty and membership programs

Loyalty programs are packages of actions or benefits

offered to customers in exchange for repeat purchases

(palmer et al., 2000) a common practice in food retail,

Loyalty schemes are part of defensive marketing strategies

which aim to retain existing customers.

Retailers use loyalty cards to identify and to reward their

customers for their loyalty. More precisely, loyalty cards

enable companies to acquire knowledge about and develop

a better relationship with their customers.

Several authors‘ state loyalty and membership cards must

provide value to their holders (Mauri, 2003; Yi and jeon,

2003; Meyer-waarden, 2006b). It also helps Retailers to

differentiate themselves from their competitors.

Consumer satisfaction is manifested in loyalty: Dick and

Basu (1994) suggest that loyalty is the result of a more

favourable attitude and repeat purchase behaviour. Meyer-

Waarden (2006) found that loyalty programs have a positive

impact on customers‘ share of wallet.

Bhattacharya and Sen (2003) propose that strategies to

develop customer identification are especially beneficial in

industries where consumers purchase frequently, and

differentiation between suppliers is low. DeWulf et al.,

(2001) show for relational investments in consumer–firm

relationships the existence of a reciprocity norm:

customers evoke obligation towards those who treat them

well or provide value.

In addition, customers who become members of the loyalty

program are likely to identify more strongly with the

company, because the membership relates them to a group

of privileged customers (Bhattacharya et al., 1995 ).

Hence, loyalty programs can create affective commitment, a

generalized sense of positive regard for, and attachment to,

the organization. In this way, loyalty programs not only buy,

but also earn, customer loyalty.

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2.10 Efficiency Measuring Mechanism :

One problem that deserves attention is the lack of

connection between strategy and measurements. Adams et

al. (1995) report that many measurement initiatives are not

derived from strategy and are therefore not supporting the

business. Although it seems obvious and natural to base a

measurement system on the company's strategy, Eccles

(1991) claims that a surprising number of retailers do little

to measure the variables described in their strategies.

Because of the missing connection, measures and

measurement activities seem focused on internal functions

instead of overall company performance and customer

needs.

He added, ―Managers in charge of the operations

sometimes introduce metrics to allow them to be in control.

When a specific problem or activity has received

management attention for a while, it is usually corrected.

Attention is then automatically focused on other and more

urgent problems. While new metrics are defined to monitor

the new problems, the old metrics are kept because the

problem might turn up again. Consequently, the number of

metrics increases while consuming more and more

resources, but adding little value.‖

2.11 Logistics :

Logistics is an important component of supply chain

management (Stank et al., 2005). The Council of Supply

Chain Management Professionals (2007) defines logistics

management as ―that part of Supply Chain Management

that plans, implements, and controls the efficient, effective

forward and reverse flow and storage of goods, services

and related information between the point of origin and the

point of consumption in order to meet customers‘

requirements.‖ Stank et al. (2002) describe the

Importance of integrating the logistics processes of all

supply chain partners to better serve the needs of ultimate

customers. Rodrigues et al. (2005) identify logistics as ―one

of the largest costs involved in international trade.‖

Today, many companies are outsourcing some of their

logistics and supply chain functions to outside firms as

they wish to focus on their core business or because

another company can provide a competitive advantage

through that area. (Quinn & Hilmer, 1994).

Logistics has emerged as a major tool in company

management. Its importance was recognized by retailers

when they began to exploit it to achieve a sustainable

competitive advantage. (Pache’, 1998).

Food retailers have quickly realized that logistics

outsourcing requires the acquisition of organization know-

how to optimise cost conditions, service and reactivity. In

fact they must have criteria to objectively compare

performances of the various contractors and then monitor

specialized service. (Pache‘ 1998)

Logistics outsourcing amounts to permanently managing a

series of contracts with specialized service providers

whose service quality, reliability and reactivity are not

known. Thus the idea of outsourcing logistics is moving

towards the mainstream (Pache‘, 1998)

Outsourcing logistics is a continuation of the strategic

approach and results from a very progressive

transformation of older managerial practices. The trend is

to resort to specialised service providers with whom long

term relational contracts are sometimes signed. (Stank and

Daugherty, 1997)

So the transition from completely self handled to totally

outsourced logistics corresponds to a completely renewed

vision of the retailers

In other words, ―retailers can impose strict discipline on

suppliers in terms of quality control and delivery

schedules‖ (Fernie and Mckinnon, 1991) this improvement

in the performance of the supply chain should, in the last

resort, increase the value provided to end users.

2.12 Manpower Utilization In Retail :

Manpower practices of Retailers have not been the subject

of extensive academic research. This is unfortunate, as

effective HRM and efficient manpower practices are

important for the success of retailers of any size.

(Arrowsmith and McGoldrick, 1996). Due to multi-faceted

nature of large scale retailing, human resource manager in

large retail chains in particular face a number of formidable

challenges as they have to manage an often quite diverse

workforce spread across many retail role, functions and

location.

Food and grocery retail is frequently associated with

irregular working hours and mediocre pay. Managing and

motivating a diverse workforce with disparate interests and

aspirations is often a challenge.

Automation has changed the nature of many jobs in the

Indian retail. The Researcher tried to understand how the

food and grocery organised retail outlets are optimizing

their manpower.

According to KPMG report on Indian Retail (2010): Time to

change Lanes, It is stated that Indian retailers are turning

their attention towards employee productivity to boost

sales. Many retailers are going slow on hiring in back end

operations with training staff high on their agenda.

Companies need to review their optimization strategies in

the changing environment as with effective optimization

they are likely to be able to bring about savings leading to

improved competencies even in an unfavorable climate.

Further Retailers like Reliance ,Reliance Fresh stores has a

unique model of manpower optimization in which it aims to

provide direct employment to 5 lakh young Indians and

indirect job opportunities to a million people. The company

has plans to train students and housewives in customer

care and quality services for part-time jobs. This is unique

because it will create a talent from where the resource can

be drawn for peak demand periods in the stores.

In the same direction, Future Group strongly believes that

Talent management continues to be the core focus for the

company. Considering the multiple businesses and rapid

expansion expected across the business, the company saw

merit in taking a fresh guard to the way in which business

would run in order to meet the next leg of expansions.

During the year 2006-07, the company conducted an

extensive review of in-house talent management, which

involved mapping every managerial position in the

organization for their skill sets, competence and attitudinal

aspects as well as taking an inventory check of the existing

talent base and addressing their development needs.

Development Centers were created with in-house

assessors, which further aided in identifying potential

resources and helped chalk out post assessment

development plans.

Continuing with its policy of strategic alliances, the

company is collaborating on joint degree programs with 15

management schools, design institutes and institutes of

higher learning in areas like food business, supply chain

management, design experience management etc. This

‗Seekho‘ program‘ for external and internal candidates has

ensured a steady stream of mid level, well trained retail

professionals every year.

The company‘s ‗Gurukool‘ program provides the front-end

employees an opportunity to imbibe the company‘s values

and a sense of ownership to the company.

(www.scribid.com)

2.13 Gaps in study and Important Variables :

While the literature review covers all important variables of

organised retail viz. supply chain, on shelf availability and

problem of stock out, shelf space utilization, consumer

satisfaction, technology in retail, measurement of efficiency

etc. There is no attempt made to correlate the supply chain

or use of technology with consumer satisfaction,

particularly in the Indian context and understand how the

independent variable of stock availability and stock display

impact consumer satisfaction. Thus, the literature is

missing in integrating customer satisfaction with total

supply chain as measured in terms of stock availability and

stock display.

Further, on efficiency parameters like shelf space

utilization, manpower utilization, redressing consumer

complaint literature is mostly in the context of matured

western markets and detailed study on this in the organised

food and grocery sector has not been undertaken.

CHAPTER 3

OBJECTIVES AND HYPOTHESIS

Table of Contents

No. Title Page No.

3.1 Objectives 73

3.2 Hypothesis 75

Based on gaps identified in literature review

following objectives and hypothesis were set for the

research study

3.1 Objectives :

1. To study effect of Supply Chain Alignment on Customer

satisfaction.

For this research work, supply chain alignment is to be

measured in terms of availability of stock and its

effective display on the shelves in the store. For measuring

customer satisfaction, parameters like range of goods

available, freshness of stock, price fluctuation etc are used.

2. To study Application of Technology impacting Consumer

Satisfaction

The researcher is trying to find out how retailers are trying

to use different levels of IT as appropriate to their format

and achieve higher consumer satisfaction.

3. To study the differences in efficiency monitoring

practices in different retail formats.

Here the Researcher is trying to assess whether different

formats differ in focus on their important efficiency

parameters.

4. To study variation in usage of outsourcing logistics

amongst different retail formats.

The Researcher is aiming to study in different retail

formats, the status of outsourcing of inward logistics for

receiving and replenishing stocks.

3.2Hypothesis :

H1: There is a positive significant correlation

between Supply Chain Alignment and Consumer

Satisfaction.

Customer satisfaction is dependent on Stock

Availability and Stock Display which depends on

Alignment of Supply Chain. This view has also been

expressed by Christopher (1992:25) who stipulates

that the ultimate purpose of any supply chain is to

satisfy customers. Further, Corsten et.al (2003,

pg603) state ―Customer satisfaction for retail

consumers is manifested by product on shelf

availability‖

H2: Application of Technology is significantly related

to Consumer Satisfaction.

The focus of the retailing sector today is to develop

link with the consumer through the use of

Information Technology. This view has been

corroborated in the Metro –AG Report Germany

(2002) ―Use of technology, can drastically improve

Efficiency and Consumer Response performance.‖

H3: Different Retail formats will differ in measuring

the important parameters of the efficiency of supply

chain.

In order to remain competitive it is imperative that

retail outlets measure efficiency and analyze data to

formulate their strategy for operations. Barros et.al

,2004 have made similar observation, ―The analysis

of efficiency measurement has become an

important activity in retail.‖

However each store format may differ in their focus

on the efficiency parameters based on their specific

requirements.

H4: Different retail formats differ in outsourcing

logistics of food items.

In Indian scenario there is a range of retail formats

covering small, medium and large stores.

Outsourcing of inward logistics for receiving and

replenishing stock will differ. It could be manual,

partly outsourced and completely outsourced.

Morgan (2006) substantiates this observation, ―The

way in which outsourcing logistics is implemented

differs from one retailer to another.‖

CHAPTER 4

RESEARCH METHODOLOGY

Table of Content

Number Title Pg

4 Research Methodology 79

4.1 Sources of Data 79

4.2 Sampling 81

4.2.1 Sampling Design 81

4.3 Probability Sampling 85

4.3.1 Random Sampling 85

4.3.2 Stratified Sampling 87

4.4 Sample Justification 90

4.5 Response Rate 92

4.6 Questionnaire Description 94

4.7 Reliability Test 97

4.8 Overcoming errors 99

4.8.1 Pre-testing & Pilot Study 102

4.9 Relating the questionnaire to research objectives

103

4.10 Approach to recording data 103

4.11 Time Period of study 104

4.12 Profile of Respondents 105

4.13 Data Analysis Techniques 118

4. Research Methodology :

This research study is based on survey of organised food

and grocery retail outlets. For the purpose of the thesis

both Primary and Secondary sources of Data were used.

4.1 Sources of Data :

Primary and secondary data sources were used to collect

information about aspects of supply chain and customer

satisfaction in organised food and grocery retail

businesses. Survey involving personal face- to -face

interviews with both retailers and consumers of Mumbai‘s

organised food retail was conducted. Key participants in

Mumbai‘s food retail were included. Executives (general

managers, operations managers, buyers, store managers)

of 52 organised food and grocery retail outlets covering 11

hypermarkets, 7 mid sized outlets and 34 convenience

stores responded to the survey In addition to this 1103

consumers shopping in these outlets were interviewed.

Information collected from secondary data sources

included books, magazines, journals, reports and websites.

A systematic review of published reports like Datamonitor,

Euromonitor, and KPMG about supermarkets in India was

conducted. These data that are intended to meet the needs

of government departments and local governments are

usually clearly defined, well documented and of a high

quality. Such data is accessible in compiled form, and are

widely used by other organization and individual

researchers (Saunders, et al, 2003)

Further, Data on the internet was located using search

engines like EBSCO and online journals of Retailing. The

researcher while accessing the secondary data excluded

the data which was not relevant to the researcher‘s

objective and questions.

The researcher made a quick assessment of the reliability

and validity of the data by looking at the source of the data.

Dochartaigh (2002) refers to this as assessing the

reputation of the source

―The secondary data provide a useful resource with which

to compare or set in context the researcher‘s own findings‖

(Saunders et al.2003). However, Prof. Bowley points out,

―secondary data should not be accepted at their face value‖

The reason is that such data may be erroneous in many

respects due to bias, inadequate size of the sample,

substitution, errors of definition , arithmetic errors etc

(Gupta,2005). Keeping this in mind the researcher ensured

that the secondary data used is suitable for this research.

The suitability of data was judged in the light of the nature

and scope of investigation. The researcher checked the

adequacy of the data in the light of the requirements of the

survey.

4.2 Sampling :

Technique of Data collection was Sample Technique where

a part of the universe is studied and the conclusion about

the universe is drawn from this data. In consumer research

census is not practical and normal sampling technique is

used for the survey.

4.2 .1 Sampling design :

Sampling design is a definite plan for obtaining a sample

from a given population. It refers to the technique that the

researcher adopts in selecting items for the sample.

(Kumar, 2008)

Outlining the universe and defining the sample unit:

While developing the sample design the first step

undertaken by the researcher was to clearly outline

and identify the set of objects to be studied. In this

case it was the organised food and grocery retailers

in the city of Mumbai and its suburbs and the

consumers shopping in these outlets.

Sample Frame: Sampling frame is the actual set of

units from which a sample has been drawn

(Shahjahan,2005) In this study the sample frame is

the organised Food and grocery outlets in Mumbai

and the population that shops in the organised food

and grocery retail. The researcher took care to

ensure that the source list is as representative of the

population as possible.

Here the source list was prepared by the researcher

which was comprehensive, reliable and appropriate. For

this purpose the sample frame was devised after going

through the various published reports that described the

various attributes of the formats and enlisted the

recognized food and grocery retail outlets in Mumbai.

In terms of the consumers, the researcher attempted to

study customer satisfaction in organised food retail. For

this purpose, the researcher took care and interviewed

only those consumers who were shopping in these retail

outlets.

If the sampling frame is inappropriate it will lead to a

systematic bias: (Kumar, 2008) the researcher carried

out a careful investigation of the frame to be adopted

since the defects are not apparent until a detailed

investigation has been made.

Kish (1995) posited four basic problems of sampling

frames:

1. Missing elements: Some members of the population

are not included in the frame.

2. Foreign elements: The non-members of the

population are included in the frame.

3. Duplicate entries: A member of the population is

surveyed more than once.

4. Groups or clusters: The frame lists clusters instead

of individuals.

The researcher took care to overcome the basic

problems of missing elements by extensively reviewing

the list of retailers in the city of Mumbai and carefully

excluded the non members of the population or foreign

elements in the source list i.e. In this case they were the

kirana stores who have only modernized their front- end

and display and cannot be included in the study.

Further the researcher made certain that there were no

duplicate entries or no member of the population was

surveyed more than once and that frame listed only

individuals and not any groups or clusters.

Sample Size:

― Sample size is one which fulfills the requirements of

efficiency, representativeness, reliability and flexibility for

the research work ,‖ (Kumar,2008) That is why the sample

of consumers and food and grocery retailers was so

selected that they truly and adequately represent the

universe otherwise the results obtained would be

misleading. Taking this into account the researcher

interviewed 1103 consumers at 52 different food and

grocery retail formats across the city of Mumbai.

The size of the sample was considered to be optimum

because it fulfilled the requirements of representativeness

and reliability. Gupta (2005) emphasized that sample

selection and data collection are interwoven and one has an

impact on the other.

4.3 Probability Sampling :

Sampling for this thesis was not haphazard selection.

Probability sampling where every item in the universe has a

known chance or probability of being chosen for the study;

it includes Random sampling and stratified sampling

methods which were used by the researcher.

4.3.1Random Sampling :

To ensure balanced representativeness of the consumers,

the random sampling was used. According to Gupta (2005),

Simple random sampling refers to that sampling technique

in which each and every unit of the population has an equal

opportunity of being selected in the sample, ―personal bias

of the researcher does not influence the selection.‖

This sampling was preferred over other techniques

especially convenience sampling because it may hardly be

representative of the population (Gupta, 2005). In

comparison, since random sampling is a probability

sampling, it eliminates bias due to personal judgment.

In terms of Retailer sampling, Stratified sampling was used.

In this type of sampling the population embraces a number

of distinct categories; the frame can be organised by these

categories into separate "strata." A stratum is a subset of

the population that shares at least one common

characteristic. (Gupta, 2005). According to Shahjahan

(2005) the units within each stratum are as homogeneous

as possible. Various Strata are non over- lapping. This

means each and every unit in the population belongs to one

and only one stratum.

This method could be used because the population could

be partitioned into smaller sub groups of population, each

of which is homogeneous according to the particular

characteristic of interest. Stratified sampling is

considered to be appropriate for this study because it

reduces sampling error and also the Variability within

strata is minimum while Variability between strata is

maximum . C.J Grohman has rightly pointed out that this

type of sampling balances the bias of deliberate selection‖

(Gupta, 2005)

Further it was found to be representative of the population:

Since the population is first divided into various strata and

then a sample is drawn from each stratum there is a little

possibility of any essential group of the population being

completely excluded.

In addition to it being representative it was also considered

to be more accurate (Gupta, 2005) and the division of the

population into relative homogeneous sub –groups leads to

administrative convenience(Shahjahan,2005)

4.3.2 Stratified Sampling :

While applying Stratified sampling, the organised food and

grocery Retailers, were sub divided or stratified into

mutually exclusive groups and included all items in the

universe. After this a simple random sample was then

chosen independently from each group. Here the base of

stratification was the size of the store. The researcher

created three strata‘s for the purpose of this study viz.

Hypermarket, mid -sized store and convenience stores.

Grocery retail formats are subject to a wide range of

variation(Kahn&McAllist,1997;Levy&Weitz,2001) The three

formats used for our study i.e. Convenience store, midsized

stores and hyper markets compete for the major shopping

trips and constitute the organised food and grocery

market(Marion ,1998)

TABLE 4.3.2

Classification of Retail sample: The three formats and their

significant characteristics:

Area Convenience

stores

Midsized stores Hypermarket

Range Food products

and groceries

Broad and deep

food

assortments,

significant non

food

assortments

Very broad and

deep

assortments of

food and non

food products

USP Fast and

convenient

grocery

shopping

Broad range of

Food and non

food product

One stop

shopping:

Focus also on

shopping

experience

Size 1500-2500sq.ft 3,500-

5,000sq.ft

8000 sq.ft and

above

Sourcing centralized centralized centralized

Source: Researcher’s Own Analysis

4.4 Sample Justification :

Mumbai was chosen for study because it is the most

important economic and commercial Centre. In addition to

this it is among the top 10 preferred location for organised

retail in India. (www.dnb.co.in/IndianRetailIndustry) Further,

Organised retailers from (Mumbai, Pune and Ahmedabad

have the highest share (67.1%) in the total floor space in

India. (www.dnb.co.in/IndianRetailIndustry)

―Mumbai‘s retail system is the most advanced, with the

largest number of supermarkets chains, the biggest

department stores and the largest diversified retail

conglomerates in India.‖ (www.cbreindia.co.in,

www.dnb.co.in/IndianRetailIndustry)

Organised retailing is growing parallel with real estate

development in Mumbai. With new residential complexes

coming up, there is ample opportunity for the Retail chains

to open new outlets in these locations catering to cluster of

nearby residential complexes. With middleclass population

living in these areas who would like to shop in modern

retail outlets, these stores quickly gain the needed critical

http://www.dnb.co.in/IndianRetailIndustry


mass of the customers for the commercial viability of the

enterprise.

Diversified residential complexes in the city of Mumbai truly

represent the urban middle class in India with scope for all

three retail formats to co-exist. Also retailers in Mumbai

have attained a certain level of maturity in to life cycle and

hence data can be relied upon to understand the current

scenario of organised retail and make future projections.

It may be mentioned that Mumbai is a trend setter in

organised retail which is being emulated by other metros.

Mumbaikars are well informed consumers and the local

supermarket chains showed much more willingness to co-

operate in this study than their counterparts in other cities

which further motivated the researcher to conduct the

study in the city of Mumbai.

4.5 Response Rate :

Response rate is calculated by the number of individuals

who respond and complete the questionnaire divided by the

total number of individuals contacted as given below:

Response rate: Number of individuals who respond and complete the questionnaireX10 0

Total number of individuals contacted

Response rates are strongly affected by the method of data

collection. In general, the more interaction between the

potential respondents and the researcher, the higher the

response rate. (daa.com.au)The researcher collected the

data using face to face interviews.

In this research, a total of 80 Retailers were approached to

complete the questionnaire. Out of which 52 retailers filled

them which was used for the study. Though 3 more retailers

responded, they were not included in the study as they did

not permit the researcher to interview the consumers

shopping in there. Multiple outlets of various Retail store

chains were also covered.

A total of 1680 respondents were approached out of which

1103 respondents from a cross section of people belonging

to different age, Gender, Marital Status, education level and

employment filled the questionnaire.

Thus response rate of questionnaire for Retailer was 65%

and for the consumers it was 65.5 %. According to Gupta

(2005) generally, the highest response rates in surveys

based on random samples are achieved when personal face

to face interviews are conducted with the respondent. For

this purpose the researcher conducted face –to face

interviews

In order to improve the responses, the researcher had a

short covering letter which focused on the importance of

the study and the respondent‘s reply. The questionnaire

was short and easy to complete. The researcher tried to

increase the trust by displaying the official documents and

stationery demonstrating it as an academic research work.

The researcher ensured that the questions were not

ambiguous, had clear instructions and asked only what was

necessary. In the beginning, before starting the data

collection, the researcher phoned, emailed or personally

met the retail executives to inform about the interview and

set it up. The person approached were part of the target

population

4.6 Questionnaire Description :

In this research work questionnaire used was specifically

designed for this survey. Questionnaire is a data collection

tool in which each person is asked to respond to the same

set of questions in a pre determined order (deVaus, 2002).

To gain insights into the supply side and to understand the

operations of organised food retail, before formulating

questionnaire, key officials responsible for retail

modernization and experts from various economic and

distribution research centers in the city were met. Since the

intention was to gain an understanding of the relevant

issues, the interviews typically involved a great deal of

probing and exchanges.

In accordance with the topic of research and the purpose of

testing hypothesis, a questionnaire was prepared which

included aptly worded questions with proper relevance and

emphasis on the data desired for the purpose of the

investigation.

The role of questionnaire is to ensure a structured

interview across all subjects. It is an important element in

the success of data collection. The survey through

questionnaire was administered by the interviewer through

face- to- face interview.

For the thesis two sets of questionnaires were prepared.

One for the retailer and the second for the consumer. Pre-

tested questionnaire with both open ended and closed

ended questions for retailers and another questionnaire

with only closed ended questions for consumers was

designed.

In the Retailers questionnaire, some additional questions

were included on measuring the efficiency parameter

which are not required for testing the hypothesis but would

give us an idea about over all controls being followed in

organise retail.

Further, the questionnaire can be broadly categorized into 2

divisions:

The two sets of questions

1. Classification Data and

2. Questionnaire Data

Classification Data on profile of Respondents: Consists of

questions which include general preliminaries such as Age,

Gender, Marital status, occupation and educational

qualification. This was done to get a perspective on

distribution of profile of consumers.

For the questionnaire data, the researcher opted for a

structured interview because a structured interview is one

in which each subject or respondent is asked a series of

questions according to a fixed and a prepared interviewing

schedule. Semi structured interview was avoided as it could

mean different things to different people. (Brace 2004)

―Questions applying identification and description of the

respondents should come first followed by major

information questions.‖(Gupta, 2005) The sequence of the

questions was considered carefully in terms of the purpose

of the study and the persons who will supply the

information.

Further, the questions were arranged in a logical order so

that a natural and spontaneous reply to each was induced.

The questionnaire administered to the consumer consisted

of 12 statements to be rated on a 4 point rating scale where

1 meant very low and 4 meant very high. The purpose of a

rating scale is to allow respondents to express both the

direction and strength of their opinion about a topic.

Typically, market researchers prefer respondents to make a

definite choice rather than choose neutral or intermediate

positions on a scale. For this reason, a scale without a

midpoint is preferable, provided it does not affect the

validity or reliability of the responses. (Garland, 1991)

The number of the questions included depended on the

objective and scope of the investigation: (Gupta, 2005). For

this thesis the questionnaire included four statements

regarding stock availability, two statements regarding stock

display and six statements regarding customer satisfaction

which the consumer at the food retail outlet had to respond

to by choosing the option that best suited him / her. These

options were rated from 1 to 4.

4.7 Reliability Test :

The questionnaire was further tested for Cronbach Alpha α

reliability to test the internal consistency of the items.

According to Aiken,(2003) This is a general formula for

estimating the reliability of a test consisting of items on

which different scoring weights may be assigned to

different responses.

Reliability refers to the consistency of scores obtained by

the same person when re-examined with the same test on

different occasions or with different sets of equivalent

items or under variable examining conditions.

SPSS was used to analyze the data. In this research,

Cronbach Alpha reliability coefficient for the consumer

questionnaire was found to be 0.740 which is within the

acceptable range. (George and Mallery, 2003)

Another Set of Questionnaire was designed for the retailers.

Here split half reliability test was used which is a method of

assessing internal reliability by correlating scores from one

half of the items on an index or test with scores on the

other half of the items.

Split half Co-efficient for the questionnaire was found to be

.741 which is within the acceptable range. Thus we accept

the questionnaire for the retailer as a reliable testing

instrument

For getting responses, both Nominal and Multiple choice

questions were used to get the answers. Nominal

questionnaire or Yes and No questions pose a simple

alternative to the respondent. While multiple choice

questions: the possible answers are known and few in

number. Nominal Scale was used for 13 questions

pertaining to efficiency measuring mechanism and rating

scale was used for the question on Technology. To get a

single response on outsourcing of logistics a three point

scale was used.

4.8 Overcoming errors :

In order to overcome bias in the selection process, the

researcher drew the sample entirely at random. Due to a

large sample size, the researcher had to take care of both

sampling as well as non sampling errors.

Cape, Lorch and Piekarski (2007) shows how drop out is a

function of length of questionnaire, as respondents become

bored and fatigued. To overcome the danger of

respondents continuing reluctantly till end providing

potentially unreliable data, the researcher ensured only

relevant questions were asked and kept the length of the

questionnaire in mind while designing the questionnaire.

The researcher took care that the inclusion of data was

from within the population only thereby reducing the fear of

over coverage. Further, data was collected from consumers

in the retail store to minimize the error and ensure that

sampling frame included all the relevant elements in the

population and overcome the problem of under coverage.

Foddy (1994:17) emphasized that the questions must be

understood by the respondent in the way intended by the

researcher and the answer given by the respondent must

be understood by the researcher in the way intended by the

respondent. To address this concern and in order to

overcome the issue of measurement error, the researcher

clarified the question wherever necessary.

The researcher was cautious of making value judgments.

Further, during the interview, the interviewer took care to

never show any expression of surprise, agreement,

disagreement or criticism when the respondent was

answering the questions asked so that the interviewee‗s

responses are not influenced

Respondents were encouraged to give frank and honest

responses; they were assured that their identity and the

identity of their retail organization would be protected.

The researcher obtained as much information as possible

about the objectives in order to maximize the value of the

study. For this the researcher tried to give an honest

indication of the time commitment involved as this is an

important concern of individuals deciding whether to

participate or not. The researcher explained briefly what the

survey is about and its purpose. In addition to this, the

researcher also outlined to what use the findings will be put

to.

Respondents were assured that all the information given

as part of the survey will be treated in strictest confidence.

The researcher assured them that under no circumstances

information on an individual retail outlet will go beyond the

academic project. The researcher also emphasized that any

findings of the survey will only be made available in the

form of aggregate results, so that it will be made impossible

to identify the replies of any individual firm.

Further, Data entry was verified and rechecked in order to

reduce processing error.

Data specification was adequate and consistent with

respect to objective of the survey. The researcher informed

and took appointments to ensure that the retailers

participating in the survey were contacted at the time

convenient to them.

4.8.1 Pre-testing the questionnaire and the Pilot Study :

The questionnaire should be pre-tested with a group before

using it with a larger sample. The advantage of pre-testing

is that the shortcomings of the questionnaire are avoided.

(Saunders et.al, 2003) It also helped researcher get an idea

about the extent of non-response likely to take place.

The researcher undertook a pilot survey. ―The pilot survey

is particularly useful for uncovering problems with the

questionnaire document.‖ (Gupta, 2005, Kumar, 2008) It

has allowed the researcher to test the acceptability of the

questionnaire to the target sample. The acceptability of the

survey in terms of the length of the questionnaire or the

time commitment required of the respondents was also

tested.

4.9 Relating the questionnaire to research objectives :

The researcher constructed and used the questionnaire to

facilitate the respondents to give the best information that

they had. Questionnaire was designed to collect data that

was required to answer the objectives of the study as

objectively as possible while minimizing the likelihood of

error occurring at any stage in the data collection and

analysis process.

4.10 Approach to recording data :

The researcher overcame the possibility of ‗mixing up data

from different interviews and not completing each

questionnaire at the time it took place‘ (Ghauri and

Gronhaug, 2002) by insisting on answering all questions

by the respondent and compiling the data as soon as it was

recorded.

A full record of the interview should be compiled as soon

as possible after it has taken place (Healey, 1991; Robson,

2002.) The researcher adhered to this and tried to capture

the exact nature of the explanation provided as well as

general points of value particularly in the area of consumer

satisfaction from the interaction with the respondents.

4.11 The time period of study :

The researcher started collecting the data in 2007. The pilot

study was undertaken in 2007 and 2008. The primary data

collection was completed by December 2009.

The researcher would like to add that recent secondary and

tertiary source of literature were included in the literature

review.

4.12 Profile of Respondents :

Classification of the profile of respondents: The

Classification Data pertains to data collected over six

questions. It was felt necessary to collect directly details of

respondents pertaining to age, gender, marital status,

education level, employment and size of the family to get an

overall profile of the customers shopping in organised retail

outlets.

The relevant charts and figures pertaining to the data

obtained with reference to the six classification factors

have been provided for the purpose of effective visual

presentation of sample distribution.

4.12:1 Age

Table 4.12:1: Classification of Data collected on the profile

of Age of the respondents

Age Frequency

below 25 yrs 308

26-30 245

31-35 141

36-40 119

41-45 142

46 and above 148

Total 1103

Figure: 4.12:1: Classification of Data collected on the profile

of Age of the respondents

The 1103 respondents were divided into 6 groups according

to their age. 27.9 % or 308 respondents were below 25

years, while 22.2 % or 245 respondents out of the total

sample were in the age group of 26-30.

Data clearly shows that organised retail is visited by all age

groups. Though 50% of customers are below the age of 30.

It could be due to demographics in India which is tilted

towards younger age.

4.12:2 Gender

Table 4.12:2: Classification of Data collected on the profile

of Gender of the respondents

Gender Frequency

Male 480

Female 623

1103 1103

Figure: 4.12:2: Classification of Data collected on the profile

of Gender of the respondents

480 males in comparison to 623 females responded to the

questionnaire.

Gender distribution of shoppers in these retail outlets

comprising of 56.5% males and 43.5% males reveals that a

sizeable number of males are also shopping for food and

grocery items. This is quite different than shopping at

vegetable markets and street vendors where overwhelming

majority of female shoppers would be expected. This also is

an indicator of changing social scene as growing number of

women are working, hence the responsibility of shopping

for essentials have to be shared.

4.12:3Martial Status

Table 4.12:3 Classification of Data collected on the Martial

Status of the respondents

Gender Frequency

Married 653

Unmarried 450

1103 1103

Figure 4.12:3 Classification of Data collected on the Martial

Status of the respondents

59.2% or 653 respondents were married compared to 40.8%

or 450 respondents who were unmarried. Though the

percentage of married shoppers is more, it is not

overwhelmingly in favor of any one group in terms of

marital status.

4.12:4 Educational Qualification

Table 4.12:4 Classification of Data collected on the

educational qualification of the respondents

Qualification Frequency

Matriculate 46

Hsc 162

Graduate 569

Post Graduate 285

Others 41

Total 1103

Figure 4.12:4 Classification of Data collected on the educational qualification of the respondents From the above figures it clearly emerges that shoppers in

the organised food and grocery retail outlets are well

educated as 77 % of them were found to be graduate and

above. 569 respondents (51.6%) were graduates followed by

285 or 25.8 % respondents who were postgraduates.

Moreover almost all shoppers are literate which helps a

great deal to the retailer in communicating with the

shoppers. Unlike in the Kirana shops where the customer is

able to directly talk to the shop owner and get the required

information on the goods, the same is not possible in case

of organised retail. Here a communication regarding price,

offers etc has to be displayed on the shelves and hence

require a minimum reading skill for the shopper to

understand the same.

Moreover these educated consumers consider non-

monetary cost such as time and effort in evaluating

shopping at a particular store. Hence anything that can be

built to reduce time, effort and search costs can increase

perceptions of value. The shopping experience as created

by a clean, hygienic, well lit and neatly laid out store would

increase store patronage by educated people.

4.12:5 Employment

Table 4.12:5 Classification of Data collected on the details

of employment of the respondents

Employment Frequency

Government 52

Non-Government 317

Self-Employed 237

Retired 37

Non-working 460

Total 1103

Figure 4.12:5 Classification of Data collected on the details

of employment of the respondents

Close to 42% respondent or 460 respondents were non –

working; majority of them would be housewives who are

not working. In Mumbai, because of the predominance of

private sector enterprise and the entrepreneurial spirit

majority of the population comes from non-government and

self employed segment and this is reflected in the sample

as well.

4.12:6 Size of the family

Table 4.12:6 Classification of Data collected on the details

of the size of the family

Number of Family

members Frequency

1 14

2 80

3 203

4 546

5 and above 260

Total 1103

Figure 4.12:6 Classification of Data collected on the details

of the size of the family

Small size nuclear families with three and four members

constitute approximately 68 % of the total size of the

sample. This segment is under constant time pressure and

is looking for convenience of one stop shopping with wide

product portfolio and hence patronize organised retail

outlet.

4.13 Data Analysis Techniques Used :

Following Parametric and Non Parametric tests were used

to test the hypothesis

Correlation

Regression

Chi square

ANOVA

Correlation analysis deals with the association between two

or more variables (Gupta, 2005) Correlation was used

because researcher wanted to know whether there is a

correlation between Supply Chain and Consumer

satisfaction. Similarly data was tested for determining the

correlation between Use of Technology with Consumer

Satisfaction.

The Researcher used the Karl Pearson‘s method, popularly

known as Pearson‘s co-efficient of correlation. The

coefficient of correlation describes not only the magnitude

of correlation but also its direction.

Once the correlation is established, regression output is

obtained to determine statistically significant causal

relationship between independent and dependent variables.

Here the value of R2 which is the value of coefficient of

determination determines the explainable part of the

dependent variable by the variation in the independent

variable. Any value was accepted as statistically significant

only if it has a minimum significance of .05 or 95%

confidence level.

According to Chou (1963)Regression analysis attempts to

establish the nature of relationship (causal etc) between

variables –that is , to study the functional relationship

between the variables and there by provide a mechanism

for prediction, or forecasting. The researcher used

regression output to formulate a predictive model using the

value of independent variable of supply chain to predict the

value of dependent variable of Consumer satisfaction.

Chi-square was used to test the third hypothesis, ―Different

Retail Formats differ in measuring the important parameters

of efficiency of supply chain.‖ Chi square is statistical

measure used in the context of sampling analysis for

comparing a variance to a theoretical variance.

Since response used for testing this hypothesis was on

nominal scale (Yes or No), to establish whether variation to

response to each parameter by different categories of store

was statistically significant; non parametric test of Chi

square was used.

Chi Square values which were having significance of

minimum .05 were only used to accept categorical variation

in measuring of particular efficiency parameters.

ANOVA is used to simultaneously compare the mean of the

population. In this study the fourth hypothesis is, ―different

retail formats differ in outsourcing logistics of food items‖.

The researcher used ANOVA to establish whether the

difference among different retail formats in outsourcing

logistics is statistically significant. This is accepted only if

the computed F value has a significance of.05 or higher.

Here one way ANOVA was used because the researcher

took only one factor i.e. Outsourcing of logistics for food

items and investigated the differences in the response

among different categories of retail outlets

In addition to this, frequency, mean, range and standard

deviation of the data were also computed using SPSS. This

was basically done to get a perspective on the spread of

data around the mean and also how score differ in different

formats of stores. Interpreting this gives useful insight

about status of supply chain total and consumer

satisfaction as perceived by the consumer.

Chapter 5

Results and Analysis

TABLE OF CONTENTS

Sr.No Title Page

5 Result and Analysis 123

5.1 Descriptive statistics 124

5.1:1 Stock Availability 125

5.1:2 Stock Display 125

5.1:3 Supply Chain Total (Stock Availability + Stock Display)

126

5.1:4 Consumer Satisfaction 127

5.1:5 Use of Technology 129

5.1:6 Measuring of Efficiency of Supply Chain 137

5.1:7 Outsourcing Logistics 153

5.2 Inferential Statistics

155

5.2:1 Correlation and Regression 156

5.2:2 Chi Square Test 164

5.2:3 ANNOVA 168

5.3 Summary of the Hypothesis Findings 169

5. RESULT AND ANALYSIS :

5.1 Descriptive statistics :

The researcher collected data from 1103 consumers of 52

organised food and grocery outlets comprising all three

formats of organised retail viz. Hypermarket, Midsized and

Convenience store. Statistics from this data give very

useful insight into how the retailers are aligning and

focusing on the supply chain so that the stocks are always

available and visible to the consumers, the level of

technology that is being used, how efficiency is monitored

and status of outsourcing of inward logistics.

The statistics on these parameters namely, Stock

Availability, Stock Display, Consumer Satisfaction, Use of

Technology, Measuring of efficiency and Outsourcing of

Logistics are tabulated and interpreted below.

5.1:1 Stock Availability :

Table 5.1:1 Descriptive Statistics for Stock Availability

N Min Max Mean

Std.

Deviation

Stock

Availability

1103 4.00 16.00 11.79 2.25

There were 4 questions put to the consumers on the stock

availability and response was rated on a scale of 1 to 4 with

4 being the highest and 1 being the lowest.

In the table above, the Mean is 11.79 as against the

maximum of 16. This indicates that stocks of food and

grocery are mostly available to the consumers. However the

standard deviation is on the higher side which means that

there are stores which have a poor record of stock

availability and similarly some have good availability of

stock.

The range between 4 to 16 is confirming that there is a wide

deviation from the mean in the score on this parameter.

5.1:2 Stock Display :

Table 5.1:2 Descriptive Statistics for Stock Display

N Min Max Mean

Std.

Deviation

Stock

Display 1103 2.00 8.00 5.94 1.11

One of the major differentiator between organised retail and

old unorganised kirana shop is the Stock display which

helps the consumer in locating the item they require,

stimulates demand and positively contribute to overall

shopping experience.

Data on this parameter was captured by asking two

questions. The mean value of 5.94 against a maximum of 8

is fairly high and indicates that retailers are giving due

priority to this parameters. However, the standard deviation

of 1.11 is on the higher side. It may be added that there is a

constant challenge faced by the retailers in balancing the

number of SKUs on display within the constraint of space

available.

5.1:3 Supply Chain Total (Stock Availability + Stock Display)

Table 5.1:3 Descriptive Statistics for Supply Chain Total:

(Stock Availability +Stock Display)

N Min Max Mean

Std.

Deviation

Supply

Chain Total 1103 9.00 24.00 17.74 2.93

The above table integrates the responses by the consumer

to the questions on stock availability and stock display to

get an overall picture of supply chain total at the organised

food and grocery retail outlets. This shows that while there

are instances where the consumer is not getting the items

that she wants to shop for, most of her requirements are

available in the store.

Though standard deviation of Supply Chain Total is on the

higher side, the minimum value of 9.00 and the mean of

17.74 give a positive and encouraging picture about the

status of stock availability in organised food retail outlets. It

indicates that due importance is being given to this aspect

of the retail business.

5.1:4 Consumer Satisfaction :

Table 5.1:4 Descriptive Statistics for Consumer Satisfaction

N Min Max Mean

Std.

Deviation

Consumer

Satisfaction 1103 7.00 24.00 16.13 2.94

Data was collected to understand and get an insight on

consumer perception about fulfilling her aspirations from a

modern organised Food and Grocery retail shopping

opportunity. For this purpose six relevant questions were

designed to get score on whether she is getting fresh

vegetables and fruits, is the pricing at the outlet stable and

whether she is a loyal customer who regularly shops at this

outlet , her overall shopping experience and does she

recommend the outlet to others and does she buy similar

products from the street vendor.

From the above table the researcher found that the mean of

16.13 against a possible maximum value of 24 is lower

when compared it with 17.74 which is the mean of supply

chain total score. The standard deviation of 2.94 is on the

higher side and the range of 7-24 is wide. This means that

some of the consumers are satisfied with the shopping

experience offered by organised food and grocery retail

stores however some have given quite low score on

consumer satisfaction. Overall picture that emerges from

the above statistics indicates that there is scope for

retailers to improve the score on customer satisfaction

which will result in customer loyalty and achieving

sustained growth of business.

5.1:5 Use Of Technology :

Table 5.1:5.1 Descriptive Statistics for Use Of Technology in

planning and ordering of goods

N Min Max Mean

Std.

Deviation

Use of

Technology 52 1.00 4.00 3.05 1.03

In order to get a perspective on how organised retail in

India in all formats viz Hypermarkets, midsized and

convenience stores is using Technology in Planning and

ordering the goods, a questionnaire was designed to

collect the data on the same. The question asked to the

Retailer was whether process of planning and ordering of

goods was fully automated, most of it automated, some of it

automated or it is manual. The responses were rated on a

scale of 1 to 4, with 4 denoting fully automated process for

planning and ordering while 1 signified it being Manual.

From the above table, the mean value of 3.0577 against the

maximum value of 4 shows that technology is adopted to a

large extent by all formats of the retail outlets .However the

standard deviation of 1.03 is on the higher side and shows

that still there are outlets who have not modernized

beyond using barcode readers at the billing counter and

their process of ordering and planning is still manual.

From the above data the researcher can deduce that the

retailers are keen to use technology. They understand that

with the growing number of SKUs and consumer expecting

wide variety for his choice, the process of planning and

ordering is becoming complex. They will have to use

technology in order to ensure optimum level of stock

availability.

Table 5.1:5.2 Descriptive Statistics for Level of Use Of

Technology, Status of Automation table

Planning &Order Frequency

Not Automated 7

Some of it is Automated 5

Most of it is Automated 18

Fully Automated 22

Total 52

We should not lose sight of the spread of the data while

interpreting the statistics and the significance of the same

can be inferred from the frequency table above.

It is evident that the data is negatively skewed as number of

readings below the mean of 3.057 are 30 and above are 22.

Thus the mean of 3.057 has to be viewed cautiously in

drawing conclusion about the extent to which technology

has been adopted by the retailers for planning and ordering

function.

Figure 5.1:5.2: Use of Technology for Planning and

Ordering -Percentage

The above figure clearly indicate that technology has

penetrated into organised retail operation as only 13% of

retail outlets are on manual mode. 42% of outlets are now

completely relying on technology for planning and order

and additional 35% are using technology for planning and

ordering most of their items.

Table 5.1:5.3 Descriptive Statistics for Use Of Technology,

Retailers Perception

Frequency

Yes

Happy with use of Technology 50

Not Happy with the Use of

Technology

2

Total 52

The retailers were asked whether they were happy with the

use of technology and their response is tabulated above.

The objective of asking this question was to get an idea of

how the retailer themselves perceive the benefits of the use

of technology. The response would indicate the level of

commitment of the retailer in implementing technology

which is very important in getting the full benefit of

modernizing the process.

The response of 50 out of 52 retailers in affirmation clearly

indicates that the retailers are acknowledging the

usefulness of Technology and are enthusiastic about the

same.

Figure 5.1:5.3 Are Retailers Happy with Use of Technology

The above figures show that overwhelming 96% of retailers

are happy to use technology.


Classification of Retailers response

Level of Satisfaction Frequency

Very satisfied 13

Satisfied 37

Just Adequate -

Dissatisfied 2

Total 52

The researcher further classified the level of satisfaction in

using the technology as fully satisfied, satisfied, just

adequate and dissatisfied. The response to this is tabulated

in the frequency table above.

It was found that majority of the retailers, 37 out of 52 are

satisfied but not very satisfied. This could be due to host of

reasons like hardware, software and technical support

issues, gap in requisite IT skills, communication problems

with central office and warehouse and technology not being

user friendly.

Figure 5.1:5.4: Are Retailers Satisfied with the Use of

Technology

From the above it is clear that 71% of the retailers are

satisfied with the use of technology. However there is

scope further upgrading technology and making it user

friendly for the staff so that they move to very satisfied

category. Currently only 25% of the retailers are satisfied

with the use of technology and only 45 of the retailers have

given a feedback that they are not satisfied with the use of

technology.


Giving a Competitive Edge

Frequency

Competitive Edge by usage of

Technology

39

Not Gain Competitive Edge 13

Total 52

The researcher further asked whether the application of

technology has given them a competitive edge. The

response to this is tabulated in the frequency table above.

It is clear that a large proportion of Retailers, 39 out of 52

feel that technology is helping them in gaining a

competitive edge. Acknowledging the usefulness of

technology indicates that the retailers themselves are

inclined towards modernizing their business by using

relevant technology

Figure 5.1:5.5 Are Retailers gaining competitive Edge with

the Use of Technology

75% of Retailers feel that they have gained competitive

edge by using technology. This means that there is an

inherent feeling among retailers that using right technology

will make their business more competitive.

5.1:6 Measuring of Efficiency Parameters :

Regular and periodic measurement of important parameters

of efficiency of retail operation is extremely important in

order to take necessary measures where the values are not

meeting the targets. This helps in ensuring that overall

business target of profitability and growth are met. For this

the researcher chose the four important parameters of

space utilization, manpower utilization, record of consumer

complaint and housekeeping.

The researcher also collected data on 9 other standard

efficiency parameters which are normally expected to be

followed by all formats of organised retail. This was

undertaken to ascertain whether systems are in place in

the organised retail to meet the consumer aspirations and

business needs.

The data collected on 4 important parameters of shelf space

utilization, manpower utilization, record of consumer

complaint and housekeeping are tabulated below.

Table 5.1:6.1 Descriptive Statistics for Shelf Space

Utilization

Question Frequency Total

Monitoring

of shelf

Space

utilization

Type of store Yes (1) No (0)

Convenience

Store

21 13 34

Mid sized 1 6 7

Hypermarket 8 3 11

Total 30 22 52

As per data in the frequency table above 8 out of 11

Hypermarkets and 21 out of 34 convenience stores do

focus on monitoring shelf space. However midsized stores

do not attach similar importance to this as only 1 out of 7

stores is monitoring this important parameter.

Figure 5.1:6.1 Monitoring of Shelf Space Utilization

The score of large format in measuring the important

parameter of shelf space utilization is 73% followed by 62%

for the small retailers. However it is very low at 14% for the

midsized store.

Midsized stores are generally old establishments and low

score on this important parameter indicates that they have

still have not modernized and incorporated good operating

practices. Also there is inherently no urgency felt by this

category of Retailers in improving shelf space utilization as

they are not located in prime areas.

Table 5.1:6.2 Descriptive Statistics for different formats

differ in monitoring manpower utilization


Collect

Data on

Manpower

Utilization


Convenience

Store

23 11 34

Mid sized 1 6 7

Hypermarket 11 - 11

Total 34 17 52

The frequency table above shows that large format stores

give due importance to this parameter of efficiency as all 11

stores included in the survey are maintaining a record of

manpower utilization. Even in convenience stores the figure

is significant as 23 out of 34 stores in this format are

monitoring manpower utilization. However, picture is rather

dismal in case of mid size store where only 1 out of 7 stores

appreciate the importance of this parameter and collect

data on manpower utilization.

Figure 5.1:6.2 Different formats differ in monitoring

manpower utilization

Due to rapid growth of organised retail in India, shortage of

trained manpower is already being felt. Also because of

higher demand, labor is becoming expensive. Hence

manpower utilization is becoming critical and it is

imperative that retailers give due priority to monitoring this

important parameter.

From the above it is clear that large stores or Hypermarkets

without exception (100%) are collecting data on this

parameter and even in small stores this figure is 67.6%

However in medium store, it is only 14.3%.

Large stores have to employ qualified staff who can

satisfactorily learn the modern work practices that are

being rolled out in these stores, be it interaction with the

customer, housekeeping, proper display of products,

regular replenishing of stock on the shelves and quickly

handling the billing. Since employees with these skills will

be expensive, to ensure that cost is kept under check, it is

imperative to keep a record of and judiciously use

manpower. This possibly explains why in 100% of

hypermarkets in the sample, record of manpower utilization

is maintained.

In small store format 68% of retailers maintain the record of

manpower utilization which is reasonably high. This is

because they also need to keep a close follow up on

manpower utilization as they cannot increase number of

employees due to space constraint and yet have to ensure

that all aspects of operations are covered.

The mid size stores are generally old establishments with

relatively older employees where potential to improve skills

is limited and replacing them is difficult. Hence retailers are

resigned to the fact that they will have to maintain the

existing staff and hence do not give enough emphasis on

monitoring manpower utilization. Their score of 14.3% on

this parameter corroborates this.

Table 5.1:6.3 Descriptive Statistics for record maintained of

consumer complaint


Record

maintained

of customer

complain


Convenience

Store

31 3 34

Mid sized 4 3 7

Hypermarket 11 - 11

Total 46 6 52

Frequency table above shows that out of 52 retail outlets

included in the survey, 46 are maintaining record of

consumer complaints. However proportion of large and

convenience stores in this are high as all 11 large stores

and 31 of 34 convenience stores monitor consumer

complaints.

Figure 5.1:6.3 Maintaining records of customer complaints

Addressing consumer complaint is very important for

achieving customer satisfaction as it conveys to the

consumer that the retailer is sensitive to their feedback,

problems and complaints and is sincere in resolving the

raised genuine issues.

From the above it is clear that all large formats have without

exception a customer complain monitoring mechanism in

place. Even in small store it is being followed by 91% of the

retailers interviewed in this format

However, in medium stores only 57 % responded that they

maintain a record of consumer complaints and thus 43 % in

this format do not have a formal system of recording and

addressing customer complaints.

100% score of large store or Hypermarkets reflects that this

category is sensitive to adverse impact that an unattended

consumer complain can have on the brand image of these

outlets. Small stores also have fairly high score because

these outlets are located in residential areas where there is

close interaction between customer and retailer and hence

the need to maintain that relation by displaying sensitivity

to consumer feedback. The score of 57% in the medium

store clearly indicates that though some of the outlets in

this format have adopted modern retail practices there is

still a fairly large chunk which has yet to modernize and

adopt good operating practices.

Table 5.1:6.4 Descriptive Statistics for monitoring House

keeping


Monitoring

house

keeping


Convenience

Store

25 9 34

Mid -sized

stores

3 4 7

Hypermarket 11 - 11

Total 52

Picture that emmerges on monitoring of housekeeping from

frequency table above is that practice of monitoring of

housekeeping is not followed equally across all formats. In

large formats all 11 stores monitor housekeeping and 25

out of 34 convenience stores also monitor. Only 3 out of 7

mid size stores monitor housekeeping.

Figure 5.1:6.4 Monitoring house keeping

One of the important association of the customers about

the quality of goods that he is purchasing is with the

standard of housekeeping of the store as he perceives. If

the products are cluttered and not displayed on the shelves

in an organised fashion it creates a negative image of the

store. This is particularly applicable in case of food items.

Ensuring a spic and span floor and removing regularly

damaged products from the shelves is very important

aspect of this parameter in creating positive image of the

store in the mind of the consumer.

As can be observed from the above table, there is a

noticeable difference in the amount of importance given to

housekeeping among different retail store formats in India.

100% of large stores interviewed by the researcher

regularly monitor implementation of housekeeping

practices. In -fact, many Hypermarkets interviewed have

outsourced their housekeeping function to give it due

focus.

In small store nearly 74% are following a system of

monitoring housekeeping.

However the priority given to housekeeping in the mid sized

stores is not satisfactory as only 43% of the stores have a

system of formally recording the status of housekeeping.

Still some of the mid -sized stores which are old have not

upgraded their physical infrastructure like having optimum

shelf design, suitable illumination and proper flooring.

Hence this limitation on the infrastructure is a barrier for

their not focusing on improving housekeeping.

Table 5.1:6.5 Descriptive Statistics for other parameters of efficiency measuring

Q.No. Questions Type of store Yes (1)

No (0) Total

Q1. Calculate the inventory turn around to compute ROI Convenience Store

82.40% 17.60% 100%

Mid sized 85.70% 14.30% 100%

Hypermarket 81.80% 18.20% 100%

Q2. Keep records to analyze stock outs Convenience Store

94.10% 5.90% 100%

Mid sized 100% - 100%

Hypermarket 100% - 100%

Q3. Record of wastage of food items due to damage Convenience Store

91.20% 8.80% 100%

Super Market 85.70% 14.30% 100%

Hypermarket 100% - 100%

Q4 Reconcile Stock, wastage and sales to ensure commercial controls

Convenience Store

91.20% 8.80% 100%

Mid sized 85.70% 14.30% 100%

Hypermarket 90.90% 9.10% 100%

Q5 structured monitoring model for measuring the efficiency of supply chain

Convenience Store

76.50% 23.50% 100%

Mid sized 57.10% 42.90% 100%

Hypermarket 90.90% 9.10% 100%

Q6 Collect data to analyze the increase in sales during sales promotion Vs targets

Convenience Store

82.40% 17.60% 100%

Mid sized 57.10% 42.90% 100%

Hypermarket 90.90% 9.10% 100%

Q7 Mechanism to trace slow moving items Convenience Store

85.30% 14.70% 100%

Mid sized 57.10% 42.90% 100%

Hypermarket 90.90% 9.10% 100%

Q8 Information gathered to know consumer preference Convenience Store

79.40% 20.60% 100%

Mid sized 57.10% 42.90% 100%

Hypermarket 72.70% 27.30% 100%

Q9 Membership card to know regular Vs floating customers

Convenience Store

44.10% 55.90% 100%

Mid sized 57.10% 42.90% 100%

Hypermarket 27.30% 72.70% 100%

The researcher also collected data on 9 other efficiency

parameters which are expected to be monitored in

organised food and grocery retail across all the three

formats.

The above table shows variation in the score on efficiency

parameter of inventory turn around, incidents of stock outs,

food item wastage and reconciliation of stocks falls within

the narrow range of 82 to 100 % among all the three

formats. In the three other parameters, namely structured

efficiency monitoring model, measuring of increase in sales

during promotion and tracking slow moving items, the

range is 57-91% covering all the three formats. The data on

measuring consumer preference and product range and

having membership card, have a range of 57-79% and 27 to

57% respectively.

Overall picture from the data indicates that among the mid-

sized store format, a number of stores have still not

adopted modern retail practices. Both the large and small

stores are focusing on having the systems of modern

organised retail in place with an objective of aggressively

pursuing the agenda of profitable growth.

5.1:7 Outsourcing of logistics :

Table 5.1:7.1 Descriptive statistics for outsourcing logistics

Self handled

Partly outsource

Comp outsource

Total

Type 1 2 3

Convenience Store

12 18 4 34

Mid Size 2 3 2 7

Hypermarket 3 5 3 11

Total 17 26 9 52

Data in the above table was collected with an objective to

understand how the inward logistics for food and grocery

items is handled by different formats. Do they handle it

themselves by having dedicated transport for bringing in

the goods from the source or they have tied up with the

logistic service provider. The question asked to the Retailer

was whether they completely outsource logistics, partially

outsource or handle it themselves.

Table above shows that only a small number of 9 outlets

out of 52 completely outsource logistics. Majority of the

retailers (26 out of 52) only partially outsource. There are

still sizeable number of retailers (17 out of 52) who handle

logistics themselves.

Figure 5.1:7.1 outsourcing logistics percentage

Figures from above table clearly indicate that nearly half of

retail outlets across all formats (43% to 53%) are partially

outsourcing logistics. This means that they are tailoring

their logistics model as appropriate to their needs.

Very few of the retailers are following a model where inward

logistic is completely outsourced as indicated by low

figures of 11.8%, 28.6 % and 27.3 % for convenience, mid

and large sized stores respectively.

It must be understood that the full benefit of outsourcing of

logistics can only be realized provided there are mature and

modernized logistics solution provider available who have

the requisite capability of providing reliable and timely

delivery. In India with the emerging organised retail

business this is a new opportunity for the logistics solution

providers and this is not yet completely matured and is still

evolving. Large reliable logistic solution providers are still

primarily confining to servicing large formats.

As we can derive from above table 35.3 % of small stores

are still completely managing themselves their inward

logistics where as the figure is 28.6% for medium and

27.3% for large stores.

The above figures indicate that there is no noticeable

difference in the outsourcing of logistics across different

retail formats.

5.2 Inferential Statistics :

The researcher has collected responses from 1103

consumers and 52 retailers across different formats of

organised retail. Hence the data to be analyzed is entirely

primary data. The objective of the analysis is to determine

its statistical significance. For example, whether there is

correlation between supply chain total and consumer

satisfaction, if so what is the strength of the relation, how

much of variation in dependent variable is explainable and

have a model which can predict the value of dependent

variable. Similarly it will be important to know, statistically

significant operational difference among the three different

formats of food and grocery retail.

For this the statistical tools of correlation, regression, chi

square and ANNOVA were used with the help of SPSS

version 17 software.

Output from SPSS package and inference drawn from the

same is summarized below:

5.2:1 Correlation and Regression :

It is very important for getting an insight about organised

retail in India to know how elements of supply chain and

Use of Technology affect consumer satisfaction. Thus we

need to know whether there is a correlation between these

parameters. If so, what is the strength of this correlation

and by doing regression analysis we should be able to

establish regression equation where based on the values

of independent variables we are able to predict the value of

dependent variable.

Correlation and regression exercise has been done for:

1. Supply Chain Vs Consumer satisfaction

2. Use of Technology Vs Consumer Satisfaction

5.2:1.1 Supply Chain Vs Consumer Satisfaction :

Here it is assumed that Supply chain is independent

variable and consumer satisfaction is dependent variable.

Supply Chain has two elements viz stock availability (SAT)

and Stock Display (SD); For Supply chain Total (SCT) both

these values have been taken together.

The result of correlation analysis is tabulated below.

Table 5.2:1.1:1 Pearson correlation co-efficient between

stock availability, stock display, and supply chain total and

consumer satisfaction

Stock

Availability

Stock

Display

Supply

Chain

Consumer

satisfaction

.498 .474 .564

Significance .01 .01 .01

N=1103. N is the total sample size of this study

Independent Variable: Stock Availability, Stock Display,

Supply Chain Total

Dependent Variable: Consumer Satisfaction

From the above table it is clear that there is a positive

correlation between Supply chain Total and Consumer

Satisfaction. The strength of the relation is .564 at .01

significance or 99% confidence level. Correlation co-

efficient of total supply chain is computed by taking the

values of stock availability and stock display together. We

have also determined the correlation between the individual

elements of supply chain viz Stock Availability and Stock

Display with consumer satisfaction. The above table shows

that there is a positive correlation between stock availability

and Consumer satisfaction and the strength of the

relationship is .498 at.01 significance and 99% confidence

level. Stock Display also has a positive co- relation with

consumer satisfaction and the strength of the relation is

.474 at .01 significance or 99% confidence level.

To find out as to how much of variation in dependent

variable is explained by the variation in Independent

variable the researcher has to obtain the regression output

of the data. This will be in form of tables, namely

Regression between Supply Chain and Consumer

Satisfaction

In order to construct a meaningful predictive model,

regression output of Data consisting of supply Chain Total

(SCT) and consumer satisfaction (CST) is done and the

results are tabulated below.

Table 5.2:1.1:2 Regression between Supply Chain and

Consumer Satisfaction

Variable B R 2 F Beta t Sig

SCT .567 0.318 512.75 .564 22.644 .01

Independent Variable: Supply Chain Total (SCT)

Dependent Variable: Consumer Satisfaction (CST)

From the above tables the value of R2 is .318 which means

that 31.8% of the variation in customer satisfaction score

can be explained by variation in Total Supply Chain Score.

As mentioned by Shahjahan, (2007) the utility of regression

equation is judged based on:

1. The overall F test for the model. If this is significant at

.05 or 95% confidence level it indicates that model is good

overall. Significance level of .01 or 99% confidence level for

F value in the table above shows that our model meets this

requirement.

2. to decide the variable is good explanatory variable of the

dependent, individual t test for each variable is to be looked

at and it must be significant at .05 or95%. In the table above

the significance level for the value of t is .01 or 99%

confidence and hence this condition is also met.

5.2:1.1:3 Coefficient Table

Model Unstandardized

Coefficients

B

(Constant) 6.077

SCT .567

From the co-efficient table we can write the regression

equation for the model as

Y=a+bX

Where y is the predicted value of consumer satisfaction

(CST), a is the intercept which is constant and has the value

of (6.077) and b=.567. Thus by putting any value of total

supply chain score as X we can predict the value of

consumer satisfaction equal to Y

5.2:1.2 Use of Technology Vs Consumer satisfaction :

With the increasing number of SKUs to be managed within

the limited space in the retail outlet, the supply chain

function is becoming increasingly complex. The use of

technology in planning and ordering of goods as an aid to

the process of procurement cannot be over emphasized.

Researcher collected data on the use of technology and the

responses were on a four point scale where score being 4

(highest), if planning and ordering is fully automated and

1(lowest), if the process is manual.

Data for consumer satisfaction has been grouped for each

store. After entering the data for 52 retail outlets in terms of

use of technology and consumer satisfaction, correlation

and regression output was obtained using SPSS software.

Following table summarizes Correlation output.

Table 5.2:1.2:1 Pearson correlation coefficient between

Application of Technology and Consumer Satisfaction

Variables Pearson Coefficient

Independent Variable –

Application Of

Technology

Dependent Variable-

Customer Satisfaction

0.327

Sig. 0.05

From the above table it is clear that there is a positive

correlation between Use of Technology and customer

satisfaction and strength of correlation is .327 and it is

significant at .05 levels or 95% confidence.

Explainable variation in consumer satisfaction by this

model can be determined by obtaining regression output

which is given below

Table 5.2:1.2:2 Regression between Use of Technology and

Consumer Satisfaction

Variable B R 2 F Beta T Sig

Use of

Technology

.523 .107 5.97 .327 2.44 .05

Independent Variable: Use of Technology (Overall T)

Dependent Variable: Consumer Satisfaction (CST)

In the table above the value of R2 is .107 which means that

10.7 % of variation in the consumer satisfaction is due to

independent variable of use of technology. Remaining

variation in consumer satisfaction could be due to other

factors which are not considered in this model.

However, significance of .05 or 95% confidence level of the

value of F which is 5.97 indicates that the model is good

overall. Further, t value is 2.44 at .05 or 95% confidence

level which indicates that the concerned variable (use of

Technology) is significant in the model.

5.2:2 Chi –Square test :

In order to establish whether different retail formats differ in

measuring the efficiency parameters. 4 specific questions

were asked covering space utilization, manpower

utilization, customer complaints and housekeeping.

Response was collected using Nominal scales (Yes and No)

format from all the 52 retailers chosen for this research

project.

Scope of study was extended to other standard efficiency

parameters which are expected to be normally followed in

organised retail.

As this data is non numerical, non-parametric test of chi-

square was used by application of SPSS package to

determine the statistical significance of the difference in

efficiency measuring practices being followed in different

retail formats.

Chi square analysis of 4 important parameters of efficiency

is tabulated below:

5.2:2.1 Chi square table for measurement of efficiency

monitoring practices of four important parameters

Parameters Pearson Chi

square

df Sig.

Shelf Space Utilization 6.653(a) 2 .036

Data on manpower

utilization

14.288(a) 2 .001

Customer complaints 8.407 2 .015

Monitoring of House

keeping

7.563 2 .023

Inference from the above table that we can draw is as

below:

Measuring shelf space utilization

The chi-square value is 6.653at a significance level of .036

or 96.4% confidence level. This shows that different food

and grocery organised retail formats differ in giving

importance to and measuring of shelf space utilization

Measuring Manpower utilization The chi-square value is

14.288 at a significance level of .001. i.e. 99.9% confidence

level. This shows that different food and grocery organised

retail formats differ in giving importance to Manpower

utilization

Measuring of Customer Complaint The chi-square value is

8.407 at a significance level of .015 i.e. 98.5% confidence

level. This shows that different food and grocery organised

retail formats differ in giving importance to and measuring

of customer complaints

Monitoring of House Keeping

The chi-square value is7.563 at a significance level of .023

i.e. 97.7% confidence level. This shows that different food

and grocery organised retail formats differ in giving

importance to and monitoring House Keeping

Other Efficiency Parameters :

Chi square analysis of other 9 parameters of efficiency is

tabulated below:

5.2:2.2 Chi square table for measurement of efficiency

monitoring practices of other important parameters

5.structured monitoring model 2.759(a) 2 .252

6.calculate Inventory turn around .053(a) 2 .974

7.Analyse stock outs 1.101 2 .577

8.Membership cards 1.696(a) 2 .428

9.Record of wastage of food

items

1.407(a) 2 .495

10.Analyse increase in sales 3.299(a) 2 .192

11.Consumer preference 1.574(a) 2 .455

12..Mechanism to trace slow

moving items

3.872(a) 2 .144

13.Periodically reconcile wastage

and sales to ensure commercial

controls

.204 2 .903

In all the other 9 efficiency parameters like inventory turn

around, record of wastage , analyzing stock outs etc the

range of value of chi-square is .053 to 3.872 which is much

below the minimum acceptable value of 5.991 as given in

the chi square table for a df-2 and significance level of

0.05. Thus there is no statistically significant difference in

measuring these parameters among the three different

formats of retail outlets.

5.2: 3 ANOVA :

In order to know whether outsourcing of logistics is

different among the different retail formats, researcher

collected Data on this from all the 52 retail outlets and the

response was on a three point scale where score of 3 is

completely outsourced, 2 is partially outsourced and 1 is

self handled. Data was categorized under the three different

retail formats viz convenience stores, midsized stores and

hypermarkets. Data was then analyzed by subjecting it to

one way ANOVA using SPSS version 17. To test whether

the sample means are statistically significant at .05

significance level. This is tabulated:

Table 5.2:3.1 Summary of ANOVA to test the significance of

difference in outsourcing between different formats.

Df F Sig.

2/49 .662 .520

In the above table the F value is .662 which is significant at

.520 which is much below the required significance of .05 or

confidence level of 95%. Thus we infer from the ANOVA of

the data that the outsourcing of logistics is statistically not

different among the three different retail formats.

5.3 Summary of the Hypothesis Findings :

Following table summarizes the findings of the Hypothesis

and statistical tools used for the analysis. The detailed

discussion on the findings on each hypothesis is covered

in the next chapter -Discussion

Table 5.3 Summary Of The Hypothesis, Statistical Tools Used And Results

Sr. No Hypothesis Statistical Test

Results

1 There is a positive correlation between Supply Chain Alignment and Consumer Satisfaction

Correlation and Regression

(r=0.564,R2=0.318,

sig=.01) Hypothesis Accepted

2 Application Of Technology is significantly related to Consumer Satisfaction

Correlation and Regression

(r=0.327,R2 =.107,

Sig=.05).

Hypothesis Accepted

3 Different Retail Formats differ in measuring the important parameters of efficiency of supply chain

Chi-Square Shelf space utilization. (Pearson chi-square=6.653,sig=.036)

Manpower utilization(Pearson chi square 14.2888,sig=.001)

Complain Redressing(Pearson chi square =8.407,sig=.015)

Housekeeping(Pearson chi square= 7.563 ,sig=.023

Hypothesis Accepted

4 Different Retail formats differ in outsourcing logistics of food items.

ANOVA (F=.662, sig=.520)

Hypothesis Rejected

CHAPTER 6

DISCUSSION

TABLE OF CONTENTS

No. Description Page

6.1 Hypothesis 1 172



6.3:1 Shelf Space Utilization 180

6.3:2 Manpower Utilization 183

6.3:3 Customer Complaint

Monitoring

185

6.3:4 Housekeeping 186


6.1 HYPOTHESIS 1 :

Hypothesis 1: ―There is a positive significant correlation

between Supply Chain Alignment and Consumer

Satisfaction‖

In the analysis of data for testing hypothesis1 we have used

statistical tool of Correlation and Regression. Stock

Availability(SA), Stock Display (SD) and Supply Chain Total

(SA+SD) are independent variables and Consumer

Satisfaction(CS) based on responses to six questions

covering shopping experience, freshness, pricing,

regularity of shopping at the same outlet, recommending

the store and purchasing the similar product from the

vendor is taken as dependent variable.

Based on correlation analysis(r=0.564, sig=.01) it is evident

that there is significant positive relationship between

supply chain and customer satisfaction Further from the

regression output the value of R2=0.318 at .01 sig , which

means that 31.8 % of variance on customer satisfaction is

explained by variation in supply chain score.

Thus Hypothesis 1 ―There is a positive significant

correlation between Supply Chain Alignment and Consumer

Satisfaction‖ is accepted.

To get further insight into the impact of two different

elements of supply chain viz. stock availability and Stock

display, it will be useful to look at the correlation of these

with the consumer satisfaction.

Stock availability and customer satisfaction was found to

have a positive correlation and the value of Pearson

correlation coefficient is 0.498. The correlation was

significant at 0.01 level or 99% confidence level. The result

showed that there is a positive significant relationship

between the two variables of stock availability and

customer satisfaction. The extent to which the necessary

products are available in the retail outlet affects customer

satisfaction. Brasher, at the Institute of Grocery Distribution

(IGD) Retail Logistics Summit 2005, described criticality of

on-shelf availability as no retailer wants to lose a sale.

According to Supply-chain expert Rowat (2006), latest

research into on-shelf availability, ―it is not surprising when

looking at the figures that on-shelf availability is seen as

extremely critical by the retail sector.‖

The relationship between stock display and customer

satisfaction was also found to be positive with Pearson

correlation coefficient being 0.474. The correlation was

significant at 0.01 level and 99% confidence level. The

result shows that there is a positive and significant

relationship between the two variables of stock display and

customer satisfaction. This means that the way is which

products are available on the shelf in a food retail outlet

affects customer satisfaction.

Displays at the point-of-sale or checkout point form another

well-known attention-capturing visual element in-store.

Although these displays are designed to stimulate

consumer purchases, they create consumer satisfaction

through the service that they provide. More often than not,

accomplishing consumer satisfaction also means a

favourable outcome to the retailer, such as repeat

purchasing, continued association and recommending the

store to others.

From the above data it can be deduced that Stock

Availability and Stock Display influence Consumer

satisfaction significantly.

6.2 HYPOTHESIS 2 :

Hypothesis 2: ―Application of Technology is related to

consumer satisfaction‖

In the analysis of data for testing Hypothesis 2 we have

used statistical tool of correlation and Regression.

Application of Technology (AT) is independent variable

and Consumer Satisfaction (CS) is dependent variable.

Based on correlation analysis(r=0.327, sig=.05) it is evident

that there is significant positive relationship between Use of

Technology and customer satisfaction

Value of co-efficient of determination i.e. R2 is .107 which

means that 10.7% of variation in customer satisfaction can

be explained by variation in the use of Technology.

Thus Hypothesis, ―Application of Technology is

significantly related to consumer satisfaction‖ is accepted

Since the result showed that there is a positive and

statistically significant relationship between Use of

Technology and customer satisfaction, it means that the

extent to which Technology is used in the organised food

retail outlet affects customer satisfaction.

In an increasingly competitive organised food retail

environment in India, retailers are trying to align the use of

Information Technology with their strategy to continually

improve and achieve higher consumer satisfaction. In this

regard it will be apt to quote Lowson (2001) who opined

―From the customer's point of view, information and

communication technologies allow improvements in retailer

service, saving shopping time through a wider assortment

and one-stop shopping.‖ This is in line with study

undertaken by the researcher.

Further some researchers are of the opinion that use of

technology has an important positive influence on entire

supply chain i.e. on the front end with consumers and at the

back end with the supplier. It will be relevant to quote

Lewis (2002) in this regard, ―IT solutions for logistic

processes have a positive influence on the value of the

retailer's relationships with its customers and suppliers.‖

The Mean for Technology application score in the survey

among retailers is 3.0577 against a maximum of 4 which

seems on the higher side and is an indication of fairly high

adaptation of overall technology by the retailers across all

Retail formats.

The Grocery retailers are increasing their sophistication in

information technology. They are increasingly using

information technology to gain better knowledge about its

customers‘ needs and to transmit this knowledge to its

suppliers. The new technology is making it possible to gain

increased control over the flow of products.

Further, the technology has altered the labor-intensive

checkout process, thereby easing the work of employees in

an organised retail outlet.

Organizations must cope with an increasingly changing

environment. Such a change derives essentially from the

evolution and changes in customers‘ needs, technological

advances to satisfy those needs and the evolution in

business management (Porter, 1997).


6.3 HYPOTHESIS 3 :

Hypothesis 3: Different Retail formats will differ in

measuring the important parameters of the efficiency of

supply chain.

For testing this Hypothesis, the researcher has used

statistical tool of chi-square as the data is non numerical

hence only non- parametric test can be used. From the

analysis, the chi square values of four parameters

considered for this research project are 6.653 for shelf

space utilization at significance level of .036 , 14.288 for

manpower utilization at significance level of .001, 8.407 for

customer complaint at significance level of .015 and 7.563

for housekeeping at a significance level of .023

From the above results we can say that Hypothesis 3,

―Different retail formats will differ in measuring the

important parameters of the efficiency of Supply chain‖ is

accepted.

The analysis of efficiency measurement has become an

important activity in retailing (Barros and Alves, 2004) It is

observed that most of the retailers (greater than 75%) are

http://proxy.library.upenn.edu:5543/science?_ob=ArticleURL&_udi=B6VGN-4V8FFBN-1&_user=489256&_coverDate=03%2F31%2F2009&_alid=1236589118&_rdoc=12&_fmt=high&_orig=search&_cdi=6043&_sort=r&_st=4&_docanchor=&_ct=120&_acct=C000022721&_version=1&_urlVersion=0&_userid=489256&md5=9df115c09c56428ff2f92b64a4657827#bib4

having an efficiency monitoring mechanism covering basic

parameters like calculating inventory turn around,

analyzing stock outs, record of wastage of food items,

analyzing increase in sales, membership cards, analyzing

consumer preference, mechanism to trace slow moving

items and periodically reconcile wastage and sales to

ensure commercial controls.

However on the important four parameters of space

utilization, manpower planning, customer complaint

monitoring mechanism and housekeeping, the emphasis

differs across different formats. The 4 different parameters

which have been considered for accepting this hypothesis

are discussed below:

6.3:1 Shelf Space Utilization :

The chi square coefficient value is 6.653. Which is

significant at .036 significance. This shows that different

food organised retail formats differ in giving importance to

and measuring of shelf space utilization.

Further, the response of shelf space utilization among

different formats suggest that while significant number of

small stores(62%) and all large stores (100%) are

monitoring space utilization, it is very low (14%) for

midsized stores. This may be due to space constraints for

both small and large format stores. In small stores this

could be due to the fact that they have to accommodate

maximum number of SKU in minimum space. In large store

there is always a need to have a wide range of products and

SKUs and hence need to utilize shelf space effectively.

However mid- size stores have not carved a niche for

themselves and are actually competing with small stores in

terms of both range of products and number of SKUs and

hence do not feel the urgency for improving shelf space

utilization.

According to Buttle,(1984)The basic aim of shelf space

allocation is to improve the financial performance of the

retail store . Through research it has been found that all

the large stores are conscious of space utilization as they

are all located in premier real estate areas. Hence they can

ill afford to waste space. In India large retail formats are in

city centre or premium shopping destination unlike in the

west where they are on the outskirts. This puts a lot of

pressure on the Retailer since the rentals are higher.

Some of the other drivers for measuring the space

utilization by the retailers as cited while reviewing the

literature are given below:

Even in the smaller stores that are part of bigger organised

food and grocery retail chain, there is an appreciation of

utilization of space. This is understandable because the

smaller retail outlets which are part of the large chain

always have pressure in keeping higher number of SKUs.

But in midsized stores, it is paradoxical that they have the

space but do not utilize it judiciously.

In India, in addition to chain of organised food retailers and

standalone stores, a large number of mom and pop stores

and co-operatives modernized themselves and joined the

organised retail bandwagon and have an urgent need for

neatly displaying the products and hence efficiently use the

available space.

Further most small stores are trying to address the problem

of space shortage by having back room storage facilities.

They are trying to have an efficient continuous system of

replenishment of the stock particularly in food items. Thus

the consumer is always able to get the stock of the items

that he needs even though the retail outlet has only limited

space to display the goods because of efficient and optimal

space utilization.

It is evident that smaller stores are here to stay, this is

corroborated by Sanwalka of KPMG (2010) who is of the

view that smaller stores of 1,500-2,500 square feet in

neighborhoods might do better in India.

Some of the larger and well performing stores emphasize

having flexibility in space. This covers the situation in

which the shelves are spaced so that the number of faces

can easily be increased or reduced for individual SKUs in

relation to necessary new products and other activities.

6.3:2 Man Power Utilization :

The chi square coefficient value is 14.288 and is found to

be statistically significant at.001 significance .This shows

that different organised food retail formats differ in giving

importance to manpower utilization in their operation.

Baret et al, (1999) are of the view, ―Today retailers are

competing on Price and service quality and manpower

utilization goes a long way in providing the correct

service.‖

Data gathered on manpower utilization shows that all large

stores 100%) are monitoring manpower utilization. However

it is practically not being followed (only 14%) in midsized

stores but a significant number of small stores (68%) are

monitoring this parameter to improve their service and

control costs to remain competitive.

Food and grocery retail manpower is frequently associated

with irregular working hours and mediocre pay. Retailers

are managing and motivating a diverse workforce with

disparate interests and aspirations. The problem is

compounded because manpower is getting increasingly

expensive.

A shortage of qualified manpower is already being felt and

hence it has to be carefully utilized. Unlike most mom and

pop stores, where family members and children are

employed and used as helping hands, organised food retail

has to employ qualified staff and have to adhere to the law

of the land in complying with the statutory norms and labor

laws.

Hence it is imperative for the retailers to have a constant

vigil and need to innovate in utilizing manpower.

6.3:3 Customer Complaint Monitoring :

The response of retailers on this parameter is analyzed

and found Chi Square coefficient value of 8.47 which is

statistically significant at .05 significance. This shows that

there is a significant difference in monitoring of customer

complains in hypermarkets, midsized stores and

convenience stores.

It is observed that all large format retailers have without

exception a regular customer complaint monitoring

mechanism in place and over 91% small stores do

regularly monitor customer complaints. However in

midsized store this figure is only 57%.

As part of large organised Retail chain, redressing of

consumer complaint is very important for achieving

customer satisfaction as it conveys to the consumer that

the retailer is sensitive to their feedback, problems and

complaints.

A survey by the National Retail Merchants Association

found that 14 percent of consumers who stop patronizing a

business do so because they had a complaint that was not

handled well. Continuing on the same note, veteran

consultant Bill Marvin, author of Cashing in On Complaints

(Hospitality Masters Press, 1997) Adds, ―Complaints just

show where the retailer‘s system is breaking down." Retail

Operators need to view complaints not as "traumatic," He

suggests, but rather as a way of "getting information from

consumers who are telling them where it's not working.‖

6.3:4 Housekeeping :

The chi square coefficient value is 7.563 and this has been

found to be statistically significant with the significance of

.023. This shows that different retail formats differ in

monitoring housekeeping of their outlet.

Housekeeping is shown to improve consumers‘ mood

which in turn can lead to making the experience of the store

visit more positive (Spies et al., 1997).


One of the important perceptions of customers about

quality is the standard of housekeeping of the store as he

perceives. If the products are cluttered and not displayed

on the shelves in an organised fashion it creates a negative

store image.

Here again there was a significant difference in the amount

of importance given to housekeeping among different retail

store formats.

All large stores regularly monitor housekeeping. In-fact

Hypermarkets like Big bazaar have outsourced their

housekeeping department to give it due focus.

Many retailers are following a policy of every employee

taking the responsibility of cleaning the store by rotation.

This is a good concept; it is not completely achieving the

desired results because of lack of accountability, leading to

diluting of focus on this important parameter.

6.4 HYPOTHESIS 4 :

Hypothesis 4: ―Different retail formats differ in outsourcing

logistics of food items.‖

In the analysis of data for testing hypothesis 4 we have

used statistical tool of ANOVA which incorporates variation

within the sample mean and also among the groups of data

which is three different formats in our case and the results

are described:

One way Analysis Of Variance (ANOVA) was used to test

the significance of difference in the outsourcing between

various formats of stores. The F value was found to be .662

at a significance of. 520. This is not meeting the minimum

significance of .05 for the F value which is required for

validation in social research. Thus the hypothesis,

―different retail formats differ in outsourcing logistics of

food items is rejected‖.

However if we observe the data in detail then it gives

important insight about the trend being followed by

different stores in their outsourcing of logistics for food

items.

Some interesting and important revelations are worth

noting. Data reveals that there is an emerging trend to move

towards outsourcing logistics in all three retail formats.

About 27-28% of mid sized and large stores completely

outsourced their logistics in grocery whereas this figure is

only 12% in smaller stores. However these smaller stores

do outsource a major part of their logistics for their food

and grocery categories i.e.53%. This means that they have

optimized the logistics model as appropriate to their size

and probably ensuring that perishable items like meat,

poultry, milk etc are outsourced, whereas other items

particularly those of low volumes are bunched together and

logistics is self handled.

According to Stephaine Mckern (2008) ―The degree of

organization in the retail sector certainly affects the nature

of logistics that prevails in that country.‖ In congruence

with the above statement, it can be said that with food

retailing getting organised, a natural outcome of this is that

retailers across formats are moving towards adopting

outsourcing logistics as a philosophy for doing business.

According to Lynch (2000), this is very important for

retailers because manpower can then be deployed to focus

on core retail functions which greatly improve the

productivity of the employees. Thus there will be fewer

people to train in fewer skills thereby increasing the level of

expertise.‖

Flexibility is another key outsourcing driver for Indian

Grocery retailers. As new markets and new products are

developed, it is difficult to forecast future logistics needs

accurately. Therefore it found that most retailers are

outsourcing majority of their processes.

However, Outsourcing logistics should not be considered

solution to all supply chain problems of the food retailers.

According to Burns (2001), ―Outsourcing is not necessarily

the best answer for every situation. The key to making the

appropriate decision about whether to perform an activity

in house or turn it over to an outside provider is to carefully

assess the pros and cons of both options and then make

the right choice that is best for them‖

In line with the above statement Logistics Providers in India

are trying to innovate and may have to move towards a

model of sharing their resources and expertise with a

number of stores so as to optimize the service and

resource deployment. By doing this the service provider

will have enough business and will also be able to

penetrate all retail formats in a cost effective manner.

Today‘s the organised food retailer does not only want to

benefit from transportation and material handling service

offered by the Logistics provider, it wants to utilize a

combination of systems, facilities and technology benefits

from qualified logistics professionals .

Continuing on the same note, a challenge that Indian

organised grocery retailers are encountering is that they

may be limited number of quality logistics service provider.

Today outsourcing has become more skill oriented. The

Mckinsey Quarterly (2006) aptly referred to ―outsourcing

as having moved beyond economies of scale.‖ And

majority of grocery Retailers In India are looking at mature

service providers who is equipped to help them in other

processes like bunching, pre-packaging of merchandise,

special packaging requirements for promotions etc

besides fulfilling the strategy of Farm- to- Fork efficiently.

CHAPTER 7

GENERAL FINDINGS

AND

PROPOSED MODEL BASED ON THE

HYPOTHESIS RESULTS

TABLE OF CONTENTS

NO DESCRIPTION PAGE

7 General Findings 192

7.1 Findings from the Retailers 192

7.2 Findings from the consumers 195

7.3 Proposed Models based on the

hypothesis results(Model 1)

200

7. GENERAL FINDINGS :

During the survey and data collection some useful insights

were obtained, both from retailers as well as consumers

which are useful for practical application by the retailers in

improving their overall business efficiency.

Some of the important findings are summarized below:

7.1 Findings from the Retailers :

1. When Retailers were asked as to how they think that

technology has helped them in getting an edge over

competition, their response was very encouraging.

They feel that it helps in managing the inventory,

saves time, gives analysis of the sales pattern, and

reduces repetitive and manual work. We can infer

from this that acceptance for use of technology is

high and employees are motivated to adopt it in the

operations which help over all operations.

2. On the question of loss in sales due to out of stock

incidents, the figures were in the range of 2% to a

high of 20%. This figure only gives retailers estimates

of direct sales lost, the intangible impact on sales

would be much higher as this is a major irritant to

the consumer and leads to a poor perception of the

retailer by the customer. Thus there is a need to fine

tune supply chain in working towards target of

number of stock outs.

3. Feedback of retailers on percentage of customers

who regularly shop at the outlet gives this figure to

be around 50-60%. This coincides with poor

penetration of membership cards and other loyalty

schemes, which is an important tool for motivating

customers to regularly shop from their patronised

outlet. This also reflects that in consumer‘s

perception there is no major difference in value

proposition among the different retail outlet.

4. According to the retailers, factors which encourage

and attract their customers to their store are

conducive ambience, availability of range of products

that they need freshness of fruits and vegetables,

competitive price and good display of products.

Customers are also looking for bargains and

shopping on special and weekly sales promotion day.

In addition to this, retailers feel that product quality,

customer service, stock display and the location of

outlet are also important reasons which make

customer decide in favour of shopping at their outlet.

5. It came to the light while interviewing retailers that

wastage of food items was between 5 and 10%. This

is ironical that the outlets have incidences of stock

outs on one hand and wastage of food products on

the other. This clearly reflects that supply chain

management is not satisfactory. Other factors which

contribute to this situation, as observed during the

survey, are poor handling and dumping of food

items.

6. It was gathered from the retailers that there is an

increase in sales during promotional days; and in

this context they typically achieve 75% -95% of the

target of increase in sales set by them. This

corroborates retailer‘s perception as already covered

above that customers are looking for bargains and

discounts. Hence, they prefer to shop on sales

promotion days.

7.2 Findings from the consumers :

During interaction with consumers some other factors

came to light which consumers considers important for his

overall shopping experience and satisfaction. These are

enumerated below:

1. Consumers consider good illumination very

important for the retail outlet as it helps locate the

product, assess its quality and also know about the

various sales promotions on offer.

2. Consumers feel that the incidents of missing price

placard on the shelves storing food items is an

irritant to their shopping experience. They lament

that in the absence of display of price and other offer

details, they do not purchase the item unless it is

important and specifically included in their shopping

list.

3. One of the major differentiator between organised

and unorganised food and grocery retail outlet is the

product display. Changes in customer expectations

about product display have resulted in their

demanding better display. Consumers are annoyed

if they come across the stock display in these

organised retail outlets similar to that of Kirana

shops.

4. Delay while making the payment at checkout counter

causes customer dissatisfaction. The artificial

queues created due to fewer checkout counters

during promotional days leads to consumer

disappointment. Customer expects minimum time

while paying his bill and checking out of the store.

Some customers patronize certain stores only

because of no rush at the payment counter.

5. The consumers expect that the shelf label have

correct details of price especially about items on

promotional offer. She is disappointed when she

realises at the payment counter that the offer is no

longer applicable and the retailer had not changed

the label. Such incidents lead to forming poor image

about the store and leads to consumer

dissatisfaction.

6. Consumers sometimes encounters situations where

the store has stock of vegetables and fruits in the

bulk storage room, yet there is stock out of items in

the store shelves which is because of not following

a proper replenishment schedule. She expects such

out of stock incidents should not occur because of

operational inefficiency.

7. Retailers are trying to push pre packaged fruits and

vegetables into the stores but consumers prefer that

these are available loose in the shelves. This helps

consumers in evaluating the quality as well as

buying the exact quantity that she needs rather than

buying in a pre determined units decided by the

store where she cannot touch and feel the item and

ascertain the quality. Further the Indian consumer is

sensitive to the price and has a belief that this pre-

packaged items are not fresh, will incur additional

cost which does not add any value and she is

reluctant to pay for the same.

8. Some customers interviewed during the survey were

not very enthusiastic about the loyalty programs of

the store. Their remarks were, ‗I do not understand

the scheme and the real benefit accrued to me‘, ‗I am

loaded with gifts that i do not need‘, ‗redemption is

time consuming‘ , ‗there is no ready feedback on the

point accrued‘ etc.

Thus consumer does not perceive the loyalty card

scheme in a positive light.

9. Customers appreciate those retailers who readily

accepts and exchange a below par quality product in

food items, it generates a positive feeling about the

outlet in their mind and leads to customer loyalty.

10. It was observed that most of the convenience and

mid size stores have free home delivery system

catering to customers from nearby areas. Stores

have a dedicated desk for taking the orders on

telephone and scheduling the delivery. This is

appreciated by consumers as it is convenient, saves

time, efforts and transportation.

7.3 Proposed Model Based On Hypothesis Result :

As mentioned in the Analysis, Researcher could develop a

predictive mathematical model from regression equation for

Hypothesis 1 and the same is given below.

Y=a+bX

Where Y is the predicted value of consumer satisfaction

(CST), a is the intercept which is constant and b is the value

of the slope of the regression line. Thus by putting any

value of supply chain score as X we can predict the value of

consumer satisfaction equal to Y.

Although this model is postulated by the researcher on the

data collected from different retail outlets , this concept

may be adopted and used by any retail chain .They can

collect data on the specific parameters of supply chain

and customer satisfaction as relevant to the organization

and by doing the analysis they can determine the value of a

and b as applicable to their store data.

They can then decide on which specific area of supply

chain that they should focus which will achieve the

desired improvement in the store performance in terms of

higher customer satisfaction and increase in sales.

This can become an important tool for predicting the impact

of any element of supply chain on the customer satisfaction

and increase in sales.

CHAPTER 8

CONCLUSION

8. Conclusion :

Last couple of years has been packed with several

significant developments for Indian Retail industry,

including the entry of many large corporate houses and

growing acceptance of modern formats. Though modern

retail is relatively new in India. It is heartening to note that

they have quickly adopted required processes in their

operations.

Given the industry‘s changing landscape and emerging

challenges, the focus of retail industry players too is

changing. They are concentrating on strengthening the

existing operations and assessing options for profitable

growth through enhancing efficiency in Supply chain,

embracing appropriate technology, upgrading skills of

employees and are moving towards consolidation and

innovation of processes.

In today‘s world of Internet and wide media reach and

connectivity, consumers are well informed and are able to

exercise their option in deciding their preferred store for

shopping. One of the major challenge modern retail outlets

are facing is in attracting and retaining new customers.

This explains the reason why all store formats be it

convenience store, mid sized store and hypermarket are

working on improving supply chain alignment with

consumer demand. This is a right focus for the retailer as

can clearly be concluded from the research that supply

chain alignment has important bearing on achieving

customer satisfaction which is the only way to remain

viable and ensure sustainable growth. Only happy

customers come back for repeat and regularly buying and

help in consolidating base of loyal customers.

Further the study reveals that retailers are focusing on

enhancing employee productivity and operational efficiency

and outsourcing of logistics to improve delivery of goods

and services and managing inventory to remain profitable.

However, the focus differs among different formats and mid

sized stores in general barring few exceptions have still a

lot of ground to cover in adapting to their processes

modern retail practices.

Further, all the processes in the retail industry right from

logistics, supply chain, store management, POS (Point of

Sale) etc are likely to get impacted positively with the usage

of technology. Although Indian Retail chains have started

deploying these technologies, there still exists a challenge

to implement them simultaneously across the entire retail

chain and make the process more relevant and efficient.

Further the study revealed that there is a high level of

enthusiasm and commitment among executives and

employees of retail chain in implementing the technology.

They all feel that technology helps them in their work and

also improves efficiency. This augurs well for the organised

retail industry.

The study also showed that though a lot of data is collected

on items like wastage, slow moving items, customer

complaints, there is no structured approach in processing

this data and comparing it with any set target. Retailers

have to move to the next phase and make use of this

information in achieving measurable targets for operational

efficiency improvement.

The study reveals that still complete outsourcing of inwards

logistics is not being significantly practiced by retailers in

any format be it Hypermarkets, Mid sized stores and

convenience stores. Most of the stores are optimizing this

process by partially outsourcing. This could be because

there is still no large dependable logistics service providers

for retailers whose services these retailer can avail. This is

a big business opportunity and large retail chains are

themselves planning to enter into this area. Once this is

implemented it is expected to have a major impact on

procurement of food items for the organised retailers.

CHAPTER 9

RECOMMENDATIONS

9. RECOMMENDATIONS :

9.1 Upgrading technology to improve efficiency :

There is a scope to upgrade the application of

technology to improve operational efficiency. For this it

is recommended that retailers should hire the services

of reputed technology solution providers to optimize

their processes for Improving forecasting accuracy,

reducing stock outs, increasing sourcing efficiency and

product movement, reducing lead time and optimizing

transportation.

9.2 Data Tracking :

At present there is hardly any effective system in place

at the retail outlets which generates data to track

individual customer spends and their buying

preferences. This data is extremely important for stores

as it has to be integrated into sourcing design to ensure

that customer‘s aspirations are met and he gets the

goods that he needs and prefers. It is recommended

that a system like customer loyalty cards need to be

effectively implemented using appropriate technology.

Data generated from this must be regularly monitored

and used for sourcing.

Similarly, it is recommended that retailers explore new

tracking and identification system like RFID. Online

information on stock availability will give accurate

feedback on stock as this system will capture the sales.

This will help a great deal in planning, procurement and

avoiding stock outs.

9.3 Manpower Skill Upgradation :

With sudden increase in modern retail, acute shortage of

skilled and trained manpower is already being felt. Since

trained manpower is scarce it is recommended that

retailers have a proper training module which ensures

that all new employees are exposed to orientation

program before being deployed for the operations. Also

properly designed regular skill upgrading and refresher

courses for the employees to be implemented. Retailers

must focus on ensuring that their employee separation

rate is at manageable level by providing them with

working environment which has opportunities for career

growth.

9.4 Manpower Deployment :

Retail operation involves long working hours and

fluctuating quantum of work both during the day and during

the week. Thus it is necessary to find innovative solutions

for optimizing manpower deployment. One of the

suggestion in this regard is to have a minimum number of

permanent employees which are required for the normal

operation and to meet the requirements of peaking during

rush hours, promotional days, weekends have a pool of

trained manpower who can be employed temporarily on

part time basis for this work as an when required. Such

temporary resource will be cost effective and can consist of

housewives who have spare time and want to supplement

their income, students in Retail who want to have exposure

to and experience of outlet management from this. The

retailer can benefit from their fresh ideas.

9.5 Customer feedback and complaint redressing system :

A proper customer feedback and complaint redressing

system goes a long way in ensuring customer loyalty and

improving the image of the store. It is recommended that

retailers have a range of options for the customers to give

feedback. It could be through a Toll free number, online

website, customers feedback box placed in the store or

even store manager periodically mingling with the

customers and asking them relevant questions to get

feedback on their shopping experience. However this

feedback must be seriously deliberated and proper in time

action must be taken so that customer feels that the store is

responsive to their feedback which will enhance his image

of the store.

9.6 Sharing of Facilities :

In Indian organised retail scenario it appears that all three

formats viz Hypermarket, Midsized Store and convenience

store are here to stay. Hence in order to make each of these

format‘s commercially viable, some innovative business

models specifically valid to Indian situations will have to be

developed. This will entail particularly back end of supply

chain. Thus, it is recommended that retailers should

consider sharing of facilities like logistics service provider

for inward logistics and godown space. This would help in

reducing the operational cost and make the enterprise

viable business proposition.

9.7 Optimum Illumination :

It was observed during the study that better lit store give a

good feel to customer while shopping. It is recommended

that stores should engage experts in the field of lighting

who can provide energy conserving and cost effective

solutions to the over all lighting requirement of the store.

9.8 Placard for price display :

It was observed during the study that price display

particularly for vegetables and fruits is not streamlined and

unsatisfactory. It is a major source of irritant to the

customer. It is recommended that properly designed

placard displaying facilities should be installed which

should show the correct price of the item in the shelves.

Many times shopper drops the item from his list resulting in

the loss of sale when he is not able to know the exact price

of the item that he wants to buy.

By implementing this recommendation the retailers will be

able to resolve this problem. Also promotional offers which

are displayed on the shelves should be valid. Sometimes

the offer is still displayed when the Sales promotional

scheme is over and offer is no more valid.

9.9 Payment Counters :

One of the important associations of the customer about

their shopping experience at an outlet is with the time taken

at the billing counter. Hence a lot of thought has to go while

deciding the number of payment counters and its location

in the store keeping the convenience of the customers in

mind. It appears that facilities provided are based on

average customers per unit of time without taking into

consideration rush hour. Further it was observed during the

survey that there was chaos during specific promotional

day of the week. It is recommended that they should have

provision for additional counters temporarily activated

during the expected peaking time to clear the rush. Also

there is a need to train the staff so that they are able to

efficiently operate cash counter and their increased

productivity will help in resolving this problem.

9.10 Stock Replenishment schedule :

All formats of the store have separate storage space for

vegetables and fruits which is used for replenishing the

stock in the shelves. However, in the absence of any

system and limited manpower, there are occasions of stock

outs in the shelves when the items are actually available in

the back end storage room and customers have to wait or

ask for refilling the shelves. It is recommended that this

operation is streamlined by assigning specific

responsibility for in time replenishment of stock to avoid

this problem.

9.11 Weighing facility :

Many convenient stores in order to avoid the operation of

weighing of vegetables and fruits keep only pre-weighed

items. This is a routine practice internationally which is

mostly to improve hygiene as perceived by the customer.

However this is not so much appreciated in the Indian

context. Here the consumer wants to feel and select the

product and wants to buy the quantity that she needs which

is not possible in case of having only pre weighed packs of

items. It is recommended that weighing facilities are

provided in every outlet so that consumer‘s needs and

expectations are met.

9.12 Efficiency Targets :

At present most retail outlets collect data on wastage of

food items, stock outs, inventory turn around but they don‘t

have quantified targets for each of these important

parameters. It is recommended that each retail store must

have target for all these parameters against which they

should measure the actual score, find the gap and make

action plan to bridge the gap. Once this structured

approach to improve efficiency is implemented, it will

positively reflect in the overall performance and profitability

of the enterprise. In the fiercely competitive environment in

which organised retail is operating, there is no substitute to

continually improve operational efficiency for achieving

sustainable growth.

9.13 Range of Products :

Many of the convenience and mid sized store in order to

emulate large format are keeping products like apparels,

books, stationery, music etc which are not related to food

and grocery and eats into already limited shelf space.

Display of these items give a cluttered look to the store and

downgrade its image as perceived by customers. While

care is taken to display them in periphery or corners, it is

recommended that the space is better utilized for displaying

premium products, promotional offers or useful

communication to the shopper. This will make the store

look neat and organised and will enhance positively overall

shopping experience.

9.14 Price stability :

Currently price fluctuations in food items particularly in

fruits and vegetables are common phenomenon more so

because vegetables are perishable commodities and cannot

be stored. Organised retail can contribute to reducing this

fluctuation. For this the retailers must have an agreement

with the suppliers to deliver to them for a period of time at

the pre negotiated price and quantity. This can give

organised retail an edge over street vendor who is affected

by fluctuation in the wholesale market.

9.15 Midsized stores :

Midsized stores have consistently scored low on measuring

of important efficiency measuring parameters. If they do not

take urgent steps in refurbishing their outlets and

improving control in operations it will be difficult for this

format to remain viable. It is recommended that they

develop a new business model where they can use their

strength of availability of space in increasing the range of

product, have better displays and offer to companies space

for promotional offers . This will lead to higher customer

satisfaction and consolidation of their customer base.

9.16 Loyalty Programs :

During the survey, it was observed that customers were

finding it difficult to understand loyalty and reward points

programs. It is recommended that these programs are made

simple where the customer is able to understand the points

he earns per unit spend, minimum number of points he

needs to accumulate for redemption and value of each

point in terms of money.

There is potential to increase sales and consolidate the

base of high spending customers by customer

differentiation and customizing promotional activities.

In this regard, the retailers can use the data collected from

loyalty cards for categorizing customers and then

specifically design promotional programs for those

customers who spend a certain minimum amount regularly

every month. Thus by focusing on few high spenders they

can consolidate the loyal customer base and have a

significant improvement in the sales of the store.

It must be borne in mind that any loyalty program can only

work effectively if it is supported by appropriate and

specifically developed software and there should be trained

manpower to operate the same. It was observed during the

survey that many retailers are collecting the data and do

not meaningfully process the same to get knowledge about

customer shopping at their outlet as they lack the required

skilled manpower for analyzing for doing the same.

Many stores offer gift items to the customer who spends a

certain minimum amount during a specified period. The

items on offer should be such that they are perceived by

the consumer as useful for household and he is motivated

to spend extra amount in collecting the gift on offer. Thus

the objective of achieving higher sale is achieved and the

consumer is also happy in participating in the scheme.

9.17 Collaboration with suppliers :

While looking at the issue of stock outs, delayed deliveries

and freshness , the researcher understood the significance

of the retailers‘ need to work closely with suppliers in order

to develop their own, and their supplier‘s competence to

provide a supply and delivery system which is meeting the

requirements of modern retail.

A transparent, collaborative, long term relationship focused

on joint development of supply should be pursued by the

retailers.

It is recommended that supply chains systems are re-

engineered by moving away from push strategy to demand

driven supply systems. This will optimize stocks and help

both in avoiding stock outs and reducing wastage of

vegetables and food categories.

9.18 Store design :

It emerged during the research that while Consumers like

to select from a wide range of products but not if it amounts

to sacrificing comfort while shopping. The researcher found

out that in some outlets little thought was given to store

layout and design and it was a copy paste of the design of

international outlets. The mistake the retailers made here

was that unlike in USA where mostly one member of the

family comes to shop for the entire household because

other members are at work etc, here in India, it is not

uncommon that more than one member of the family like to

go for shopping. Therefore it is recommended that the

organised food and grocery stores should be designed to

allow adequate space between aisles and keep walkways

free of merchandise. Cramped spaces can ruin a shopping

experience.

9.19 Minimum Mandatory standards :

Although ISO 22000:2005 has been introduced in 2005 in

western countries, it is yet not being implemented in the

evolving organised food and grocery retail in India. It is

recommended that retailers association should develop a

minimum mandatory standard covering items like hygiene,

product safety, storage condition etc and form an

independent body for certifying outlets who are following

these minimum mandatory standards.

This will motivate the retailers in improving operations as

the accreditation will enhance the brand image of the chain.

It will differentiate retailers and will attract customers to the

certified outlets.

CHAPTER 10

LIMITATIONS OF STUDY

10. LIMITATION OF THE STUDY :

10.1. This study was conducted in the city of Mumbai

which is considered to be representative of the

consumer behavior across the country and the sample

frame was determined accordingly at the time of

deciding the research design. However, this research

does not cover other metros and hence might not have

captured regional factors affecting supply chain and

consumer behavior.

10.2 Researcher has assumed that the information

provided by the retail executives and managers is

transparent and accurate. However there can be

constraints while sharing information by the retailers for

general and academic survey. Hence more accurate

information can be gathered only if such survey is

commissioned by large retailers for their own use.

10.3 The literature search and review was dependent

upon the availability and access to research information

on the subject in India. It must be acknowledged that as

organised retail is in fledgling state and hence not many

research projects in this field has been conducted and

consequently only limited authentic published work is

available and a source for secondary data.

10.4 It must be mentioned that in an academic research

work of this nature only illustrative factors affecting

supply chain alignment and customer satisfaction to test

the research hypothesis could be included in the survey.

To get deeper insight about the holistic picture of

organised retail many more specific parameters needs

to be included.

10.5 The Indian Food and grocery organised retail

scenario is evolving and is in dynamic state with all

retail chains expanding aggressively. However many

of them could not sustain this growth because of

liquidity problems and debt related issues. Therefore

care has been taken to include only those retailers

who have stabilized operations. The scenario can

change in the future. Thus this research work can

only be used as a reference for conducting a similar

study on organised retail. But the sampling frame

will have to be decided as appropriate at the time of

conducting any future study.

10.6 When the researcher started work on the thesis,

organised food and grocery retailers in India with the

exception of one or two retailers were not focusing

much on In-house and private labels. Thus this

important aspect has not been included in the study.

CHAPTER 11

FUTURE SCOPE OF STUDY

11 Future Scope of the Study :

11.1 This research was undertaken mainly to find out the

impact of supply chain alignment and use of technology

on consumer satisfaction and this was confined to the

city of Mumbai. Similar research can be conducted with

wider and different target respondents covering diverse

geographical locations. The findings from a large survey

of this nature will be generalized and applicable to over

all operations of retailers in India. Similarly studies can

be mounted on newer formats which have recently been

introduced in India like B-2-B.

11.2 As the retail chains are now trying to penetrate Tier

1 and Tier 2 cities a similar survey in these cities will

give useful information in identifying the differences in

the retail operations between large and medium size

cities and they may have to formulate their supply chain

strategies differently as appropriate for these locations.

11.3 While consumer preference on the product can be

found out from the sales data. It actually means what he

prefers from the goods and items that retailer offers to

him; However his actual aspirations and needs may be

different. Hence a separate study on consumer

aspiration and need for the range of product and his

preferred brand should be undertaken. This will help in

capturing whether consumer wants to purchase only

premium or mid range products from these stores or he

is willing to buy value for money products if they meet a

certain minimum standard of quality and packaging.

This information can be useful in knowing whether the

Indian Retail market is ready for the in-house or private

labels.

CHAPTER 12

IMPLICATIONS OF RESEARCH

12. Implication Of The Research :

12.1 Using this study as a reference model, large retail

chains can undertake an extensive study on stock

availability, stock display and its impact on overall

consumer perception about his shopping experience.

12.2 This research has clearly established the role of

stock availability and stock display in increasing

consumer satisfaction. It was observed that some time

in spite of stock being available in storage room it is not

replenished on time on the shelves, which amounts to

stock out as far as consumer is concerned. These

insights could be useful for the retailers and they can

integrate this information into their supply chain

process

12.3 As mentioned in the thesis, the researcher has

postulated a predictive mathematical model from the

regression equation of Hypothesis 1 as given below:

CST=a+ bx SCT

Where CST =consumer satisfaction

SCT= SUPPLY CHAIN TOTAL measured as stock

availability and stock display

a=Intercept (constant)

b=slope

Though this model is based on the data collected for the

study, this concept can be adopted and used by any retail

chain deciding on their own factors for supply chain and

consumer satisfaction.

12.4 The findings of the study will encourage the retailers to

re-engineer their supply chain to move from traditional

push strategy to aligning it with consumer demand.

This research study can be used by the retailers in

developing and implementing a structured approach to

measuring important efficiency parameters, reviewing the

same against set targets and making action plans to bridge

the gap and improving operational efficiency.

CHAPTER -13

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perceived value, satisfaction, and loyalty: The role of

switching costs," Psychology & Marketing, 21 (10), 799-822.

Yang- Ming-Hsien and Wen-Cher Chen (20April 1999, Pages

309-317) Available online 4 May 1999. A study on shelf

space allocation and Management. International Journal Of

Production Economics Volumes 60-61,

Yi and Jeon, 2003 Y. Yi and H. Jeon, Effects of loyalty

programs on value perception, program loyalty, and brand

loyalty, Journal of the Academy of Marketing Science 31 (3)

(2003), pp. 229–240. Full Text via CrossRef | View Record in

Scopus | Cited By in Scopus (56).

Zinszer, Paul H. and Jack A. Lesser (1981), "An Empirical

Evaluation of the Role of Stock-Outs on Shopper Patronage


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Processes," Advances in Consumer Research, Vol. 8, pp.

221-224.

Zeithaml, Valarie A. (1988), "Consumer perceptions of price,

quality, and value: a means-end model and synthesis of

evidence," Journal of Marketing, 52 (3), 2-22.

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Other Resource Material:

Businessworld, 2004, p. 85

CII Report on Retail 2008,

Images F&R Research, 2007, p. 21.

Indian Retail: Time to change lanes KPMG (2009)

KSA Technopak India Retail Report, 2005)

The Bird of Gold‘: the rise of India‘s consumer market:

Mckinsey Global Institute (Tracking the growth of Indian

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Continued Supermarket & Hypermarket Expansion Leading

To Increasingly Competitive Indian Retail Environment:

Nielsen Shopper Trends India

Adams et al. (1995) as cited in International Journal of

Physical Distribution & Logistics Management ISSN: 0960-

0035

World bank-Global Development Finance Report (2009)



Websites and Blogs

www.accenture.com

AT Kearney‘s Global Retail Development Index (www.atkearney.com)

www.clickin.com

http://www.cbreindia.com/india/eng/document/Market

Reports/cbre%20india%20retail%20market%20view%20-%20h1,%2009.pdfpg 3

daa.com.au

www.dnb.co.in/IndianRetailIndustry) Indian Retail Industry: Challenges, opportunities and outlook D&B.co.in

www.datamonitor.com/store/product/retailing in India

www.economictimes.com

www.esnips.com

www.euromonitor.com/Retailing _in_ india

www.igd.com/media,press - Cached(Brasher)

/www.ignou.ac.in/edusat/mba/mco-03/Block-3/unit-10a.pdf

www.Indian retail news.com

www.indianretailing.com (Images F&R research: India

Retail report) www.logasiamag.com/article-827-supermarket-

logistics Asiahtml ( Mckern, Stephanie: Supermarket Logistics Insight Asia 1/9/2008)

www.kurtsalmonassociates.com

http://www.accenture.com/

http://www.atkearney.com/

http://www.clickin.com/


http://www.datamonitor.com/store/product/retailing

http://www.economictimes.com/

http://www.esnips.com/

http://webcache.googleusercontent.com/search?q=cache:cC8wd9HT9RsJ:www.igd.com/media,press+Institute+of+Grocery+Distribution+(IGD)+Retail+Logistics+Summit+2005&cd=1&hl=en&ct=clnk&gl=in

http://www.ignou.ac.in/edusat/mba/mco-03/Block-3/unit-10a.pdf

http://www.ignou.ac.in/edusat/mba/mco-03/Block-3/unit-10a.pdf

http://www.indianretailing.com/

http://www.logasiamag.com/article-827-supermarket-logistics

http://www.logasiamag.com/article-827-supermarket-logistics

http://www.kurtsalmonassociates.com/

www.mckinseyquarterly.com

www.metrogroup.org

www.nsdcindia.org/pdf/Organised-Retail.pdf .

www.retailinsights.com

www.scribd.com

www.statistics.com

blog: renjitrh sethyram: retrial in Kerala

http://www.mckinseyquarterly.com/

http://www.metrogroup.org/

http://www.retailinsights.com/

http://www.scribd.com/

http://www.statistics.com/

13.2 Questionnaire :

Dear Sir/Madam,

The following is a questionnaire which attempts to study customer satisfaction in

organised food retail outlets In Mumbai. There is no right or wrong answer. Your

response will remain confidential. However you are requested to write down your

name and correct contact details as is the requirement of conducting this academic

research. The details would be required in case the examiner wants to cross check

the authenticity of this questionnaire.

Name

Address

Phone number :A B) Mobile

Email

Age group.

Below 25

years

26-30

years

31-35 36-40 41-

45years

46 and

above

Gender

Male Female

Marital Status:

Married Unmarried

Education Level:

Matriculate HSC Graduate Post graduate Others

Employment

Govt Non Govt Selfemployed retired Non-working

No. Of Family members

1 2 3 4 5 &above

Questionnaire Filled by:

Place Date

Questionnaire:

1. Do you get all the food items that you expect from the store during

your visit for shopping?

Stock of my requirement is always there

Stock of my requirement is mostly there

Stock of my requirement is sometimes not there

Stock of my requirement is mostly not there

2.Do you find the complete range of vegetables available in the store?

Always

Mostly

Sometimes

Never

3. Do you find the complete range of fruits available in the store?

Always

Mostly

Sometimes

Never

4. Do you find all the food brands that you require?

Always

Mostly

Sometimes

Never

5.Do you find it easy to locate the brand that you want to buy?

Very easy

Have to put a little effort but no major problem

For some items have to take help of shop Assistant

Haphazard display

6.How do you rate the quantity of goods in each shelf?

Very satisfied

Satisfied

Just adequate

Dissatisfied

7.Do you find vegetables/food items, fresh

Always fresh and of good quality

Mostly fresh and of good quality

End of the day, sometimes it is not fresh

Stock is mixed between fresh and old

8.Are you happy with your food shopping experience during festivals,

promotional days, weekends etc

Very satisfied

Satisfied

Just adequate

Dissatisfied

9. Do you find price of food items fluctuating within a week?

No fluctuation

Once a week fluctuation

Twice a week fluctuation

Everyday fluctuation

10. Do you buy your grocery from this store regularly

Always

Mostly

Not very particular

Small quantities and not full requirement

11. Do you recommend this store to your friends, social circle etc?

Have recommended to more than 10 people in last 3 months

Have recommended to about 5 people in last three months

Recommended if someone asks and that too about few items

Not recommend to any one in last three months

12. Similar product that are available in the store you also buy from

street vendor

No

Rarely

Sometimes

Always check at both the places and decide

Questionnaire to Retailer:

Dear Sir/Madam,

The following is a questionnaire which attempts to study the operational efficiency in

organised food retail outlets In Mumbai. There is no right or wrong answer. Your

response will remain confidential. However you are requested to write down your

name and correct contact details as is the requirement of conducting this academic

research. The details would be required in case the examiner wants to cross check

the authenticity of this questionnaire.

Name:

Retail Outlet:

Location:

Designation

1. How do you plan and order your goods

Fully Automated

Most of the process is automated

Some of it is automated

Not automated

2.Are you happy with the use of technology

Yes No

3.If yes, rate your level of satisfaction on a scale of 1-4 with 4 being

highest and 1 being least:

Very satisfied

Satisfied

Just adequate

Dissatisfied

4. Do you feel that Application of Technology has given a competitive

edge

Yes No

If yes, How?

1)

2)

3)

5.Do you have a structured monitoring model for measuring the

efficiency of supply chain?

Y N

6.Do you regularly calculate the inventory turn around to compute

return on Investment

Y N

If Yes, what you feel should be ROI on a turnover of 100 crore

_______________

7 .Do you keep records to analyze stock outs

Y N

If Yes, what could be approximate % of sales lost due to stock out-----

-------------------

8.Do you have a mechanism like membership card to know a % of

regular v/s floating customers.

Y N

a)If yes, what is % of regular customers

b)What could be % of regular customers coming to you on

Weekly

Fortnightly

Monthly basis

9.What could be reasons for the consumers’ repeat visits

1

2

3

4

10. Do you keep a record of wastage of food items due to damage

while handling, overstocking etc

Yes No

If Yes, what could be % of wastage in food items?

1)

2)

3)

11.Any shelf space utilization index(eg. Actual stock v/s available

space)

Y N

12. Do you collect data to analyse the increase in sales during sales

promotion/ offers v/s targets

Y N

If Yes, according to you what target achievement you achieve on an

average

______________

13. Do you collect data on manpower utilization?

Y N

14.Any information gathered to know consumer preference to

decide product range

Y N

15.Any mechanism to trace slow moving items

Y N

16. Any record maintained of customer complaints

Y N

17.Do you periodically reconcile stock, wastage and sales to ensure

commercial controls ?

Y N

18.Any method of monitoring of house keeping

Y N

19.Do you outsource logistic function for the food item?

Completely

Partly

Self handled

logistics: a study in organised food retail”

Documents