Evaluation of the contributions of street trading on performances of selected FMCG companies in Nigeria

Abstract

Aim/purpose – Street traders are seen selling all kinds of goods to patrons who pass-by or who are vehicular traffics on Nigerian roads, particularly major intra and inter-state roads in urban and rural areas. The study assessed the perspectives of salespersons from six selected FMCG companies regarding the extent to which street trading has contribut- ed to the overall performances of their respective firms. Design/methodology/approach – The study was done as a cross-sectional research, encompassing individuals from all levels of the sales departments of six selected FMCG companies in Lagos, Nigeria. It utilized a survey methodology by distributing a 39-item questionnaire, which employed a 5-point Likert scale to a sample of 174 participants. These individuals were picked from a larger population of 308 salespersons who were employed by the selected FMCG companies. The questionnaires were administered by email and the response rate was 56.32%. Descriptive statistics and chi-square test to determine the dependence or otherwise of the variables. Findings – The research findings established that the respondents perceived street trad- ing as a contributor to the sales performance of the FMCG companies they worked for. Among the findings was the perception that street trading had been an integral part of the channels used for distributing their companies’ products. This study also highlighted that salespersons did not consider the government’s actions as impeding their organizations from formally recognizing or as any hindrance to integrating street trading as a channel of distribution. The respondents’ views suggested that other factors are responsible for the lack of formal acknowledgement of street trading as a means through which end consumers are served. Research implications/limitations – The study affirmed the economic importance of street trading and the positive impact it has on organizations in the formal sector. It also gave insight into how FMCG companies and street traders groups can collaborate to influence favorable government policies towards street trading. Urban development planners can also find ways to provide for street trading by allocating zones where this activity can be carried out in urban areas. Originality/value/contribution – An attempt to synthesize the impact of an aspect of the informal economy on largely formal sector operators. The study provided a perspec- tive on street trading, which has not received much scholarly attention as a channel of distribution. Keywords: FMCG companies, informal retail, street trading, street vendors. JEL Classification: D3, E2, F1.