Retail network performance evaluation: a DEA approach considering retailers' geomarketing

Abstract

Stores develop customized assortments based on localization characteristics. In terms of performance analysis, these changes make it more difficult to analyse store performance. This adjustment procedure entails an internal benchmarking which needs small samples to control regional and assortment effects. This paper explores the influence of competitive environment and store neighbourhood characteristics on store efficiency by using three data envelopment analysis (DEA) models. This research is illustrated by using real data from a French supermarket retail chain at the product category level. It is shown that the two-steps DEA model is a relevant analysis tool to take into account location aspects. It presents a discriminant power strong enough to derive managerial implications with small samples.

Keywords:

• retailing
• geomarketing
• DEA
• performance
• efficiency

Acknowledgements

The author would like to acknowledge Professor Gerard Cliquet for his support in the realization for this research and C. Michel for helping with English.