Effectiveness of Supermarkets as Retail Outlet of Fast Moving Consumer Goods in Nairobi County

Abstract

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