Factors Considered important by large supermarkets in selecting their suppliers of merchandise: a case of large supermarkets in Nairobi

Abstract

The primary objective of this study was to determine which factors are considered important by large supermarkets in the selection of their suppliers of merchandise. The rationale for this study arose from the fact that little is known about the supplier selection process in retail organizations. , Liberalization in Kenya has lead to stiff competition and the supermarkets

have used merchandise content, which differs across outlets, as a competitive strategy. However, the available literature exhibits deficiencies on the factors considered important in selection of suppliers by large supermarkets. The purpose of this study was to identify the supplier selection factors, determine which ones are critical and determine the sources of merchandise for large supermarkets. To achieve the stated objectives, a census study of all supermarkets classified as large was carried out. Primary data was collected by use of a structured questionnaire personally administered by the researcher on a drop and pick basis to the purchasing manager or his/her equivalent. Factor analysis and some descriptive statistics were used in data analysis. The results showed the following are important: • Financial stability enabling provision of long term credits and discounts

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• Adaptation to new technology and world class concepts such as JIT, EDI, E-Procurement. • Suppliers involvement in aggressive advertisement and promotion at outlets. • Merchandise suitability and conformity to specifications and delivery time. Based on the findings it was recommended that the supplier's financial stability and adaptation to new technology should be put in consideration in supplier selection to enhance a mutual supplier - retailer relationship for the benefit of both.