Internal Benchmarking in Retailing With Dea and Gis: The Case of a Loyalty-Oriented Supermarket Chain

Abstract

Data Envelopment Analysis (DEA) is a relative measure of efficiency applied to a set of decision units and is being used more and more frequently in the supermarket sector. Nonetheless, given how strongly the sector’s financials depend on demand, companies need to combine this measurement with trade area information to best manage corporate efficiency. In this paper, the proposal consists of integrating DEA with a clearly articulated, structural typology so that supermarkets, based on their particular characteristics, can determine which variables are most critical for improving their efficiency. This methodology has been validated in the case of one of Spain’s five largest supermarket chains. A principal component analysis and a classification analysis were carried out on a series of internal management variables from 61 locations for which DEA had been used to calculate efficiency and to which multiple trade area variables were added using GIS. Some of them are related to the loyalty scheme membership programme. These latter variables described the implantation of the loyalty scheme member programme and were revealed as key elements for the efficiency of the supermarket. This methodology provides marketing profiles that are more adapted to local circumstances, thus allowing companies to set better internal benchmarking objectives.

The Impact of Mandatory CSR Disclosure on Firm Efficiency in an Emerging Country

“…While previous studies on mandatory CSR disclosure have explored its impact on firm performance through indicators such as investment efficiency (Liu & Tian, 2021), return on assets and cash flow (Bhattacharyya & Rahman, 2019), firm profitability (Chen et al, 2018), and firm value and market performance (Garg & Gupta, 2020;Ioannou & Serafeim, 2017), this research extends the literature of the impact of CSR policy changes on firm performance by using a different evaluation criterion -firm technical efficiency. The firms' technical efficiency indicator reflects the process of using internal resources calculated through using DEA technique as a non-parametric method (Baviera-Puig et al, 2020). The study also provides empirical evidence on the monitoring role of mandatory CSR disclosure in an emerging economy that can be generalized to other developing/emerging ones that are considering the adoption of mandatory CSR regulations.…”

“…In order to measure firm efficiency, this study applies DEA method which is a superior and more comprehensive performance measure than other traditional financial performance metrics (Baviera-Puig et al, 2020;Cooper et al, 2007). DEA collates each decision-making unit (DMU) to the "best" DMU that has efficiency equal to 1 and reach to the enveloped frontier.…”

Did New Retail Enhance Enterprise Competition during the COVID-19 Pandemic? An Empirical Analysis of Operating Efficiency

“…The results showed that the general retail enterprises would intensify competition among enterprises due to market demand and structural changes. Baviera-Puig et al used DEA and GIS to analyze retail supermarket management efficiency and conducted a principal component analysis and classification analysis on a series of internal management variables in retail supermarkets in 61 locations revealing that loyalty membership is a key element affecting efficiency [47]. Lu et al adopted the improved DEA game cross-efficiency evaluation method to select the annual observation sample data of 414 listed retail enterprises given by Forbes 2000 from 2013 to 2018 [48].…”

The cashier service macroprocess analysis in a supermarket organization: a quality management and simulation case study

“…However, the referred sector presented difficulties related to the fierce competition between local organizations and large networks, difficult access by more distant populations, heterogeneous markets and hiring qualified labor [4,5,2,28]. Thus, in addition to the quality of the products offered, it is essential to promote services with acceptable levels of quality, as a way of reaching the fullness of the market and its satisfaction [5].…”