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OPERATION OF THE SUPERSTORE CHAINS IN BANGLADESH: PROBLEMS AND PROSPECTS Muhammad Z Mamun, PhD Professor, Institute of Business Administration (IBA) University of Dhaka & Rafia Afrin, Lecturer Institute of Business Administration (IBA) University of Dhaka Contact Address Professor Muhammad Z Mamun, PhD Institute of Business Administration (IBA) University of Dhaka Email: [email protected] June 2015
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THE SUPERSTORE CHAINS IN BANGLADESH: OPERATING STATUS, PROBLEMS AND PROSPECTS ABSTRACT The superstore chains in Bangladesh are mainly concentrated in densely populated urban areas. Hassle-free shopping environment, fixed price, one stop service, brand image, quality commodities and convenient location are the key factors provoking the customers to visit the superstores. Most preferred superstore products are dry foods, toiletries and cosmetics followed by dairy, confectionary and groceries items. The shoppers are found positive about superstore product quality, and service dimensions; but they agree that the superstore products are a bit expensive. The shoppers feel the need for more quality perishable goods. The supply chain management is a major obstacle due to dependency on local market, distant transportation, middlemen, etc. For management, inefficiency, pilferage, theft, shopliftings are regular phenomena in superstores. New products lines, online shopping facilities and home deliveries can augment the scope of superstore service. Key words: brand image, fixed price, one stop service, quality commodities, superstore chains 1.0 BACKGROUND A "superstore revolution" has been underway in Bangladesh since the early 1990s. The superstores have earned a lot of popularity among the urban dwellers in recent years. Superstores have now gone well beyond the initial upper and middle class clients to reach the mass market. The effects of this trend touched not only traditional retailers 1 , but also the wholesale, processing, and farm sectors. The superstore revolution is a "two-edged sword." On the one hand, it can lower food prices for consumers and create opportunities for farmers and processors to gain access to quality-differentiated food markets and increase income. On the other hand, it can create challenges for small retailers, farmers, and processors who are not equipped to meet the new competition and requirements from superstores. The superstores spread and growth reduces the market share of traditional retailers. This decline happens at different rates over product categories and locations. The traditional sector in large cities – especially small general stores selling processed foods and dairy products - is declining fast, as they tend to have trouble competing with superstore chains that buy in bulk and have economies of scale. Declines are slower among urban traditional retailers who modernize to compete. Given that many traditional retailers are poor, it is important to help them modernize and compete, or shift assets and skills to transition to other employment. A
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