The Determinants of Retail Productivity: A Critical Review of the Evidence

Abstract

This paper discusses the literature on the established determinants of productivity in the retail sector. It also draws attention to some neglected strands of research which provide useful insights into strategies that could allow productivity enhancements in this area of the economy. To date, very few attempts have been made to integrate different specialisms in order to explain what drives productivity in retail. Here we rectify this omission by putting together studies from economics, geography, knowledge management and employment studies. It is our view that quantitative studies of retail productivity should focus on total factor productivity in retailing as the result of competition/composition effects, planning regulations, ICT, the multinational operation element and workforce skills. Further, the fact that retail firms possess advantages that are transferable between locations, suggests that investment in strategies enhancing the transfer of explicit and tacit knowledge between and within businesses are crucial to achieve productivity gains.

Performance, labour flexibility and migrant workers in hotels: An establishment and departmental level analysis

“…There is intra-establishment variance which, although it may be present in all sectors, is particularly marked in hotels where it is difficult to standardize the quality of outputs (meals served versus rooms serviced) and inputs (Gronroos and Ojasalo 2004), and demand is less predictable in food and beverage than in rooms. When analysing hotels considerable attention should be given to scale-specific effects in findings which are likely to be informed by aggregation bias (Higon et al 2010).…”

“…There are also strong temporal variations in demand for hotel services, often posing different challenges at departmental level in terms of managing labour inputs. This is rarely analysed in productivity studies because secondary, and indeed virtually all primary, survey data tend to be cross-sectional snapshots or annual averages; similar issues exist in retail productivity studies (Higon et al 2010). In contrast, this paper examines hotel performance for the establishment and the two major constitutive departments: Rooms, and, Food and Beverage.…”

“…This is a recurring theme in the general literature on productivity (Bloom and van Reenen 2010;Faggio, Salvanes, and van Reenen 2007), stemming from concerns about the limitations of findings derived from aggregated metrics (Reynolds et al 2005), due to aggregation bias or loss of variation (Higon et al 2010). Research on hotels similarly found that aggregated productivity metrics obscured the performances of different departments (Brown and Dev 2000), which conceivably can operate in contrasting directions (Baker and Riley 1994), not least because there tend to be important differences in operating conditions at this scale.…”

“…Technological differences are relatively limited amongst -let alone within -major hospitality companies (David, Grabski, and Kasavana 1996;Rust and Huang 2012). Moreover, the labour intensive nature of the hospitality industry (Ball, Johnson, and Slattery 1986;Mill 2008;Rust and Huang 2012) reinforces the importance of labour productivity (Higon et al 2010). Labour-related performance measures are the focus of this paper and we address gaps in the understanding of the different perspectives provided by physical and financial measures, and inter-departmental level differences.…”

Leveraging locational insights within retail store development? Assessing the use of location planners’ knowledge in retail marketing

“…Store format evolution is known to contribute substantially to retail efficiency and productivity (Guy, 2006;Higón et al, 2010;Reynolds et al, 2005). However, as Reynolds et al (2007, p.647) note, conceptualisations of retail change often fail to grasp the 'often experimental, incremental and often accidental processes' behind retail store format development and innovation.…”