The purpose of the paper is to examine the response strategies major supermarkets have adopted to cope with competition within the supermarkets sector. The study covered Nairobi, Mombasa Kisumu, Nakuru and Eldoret cities. It aimed at establishing the response strategies adopted by major supermarkets Nakumatt, Naivas, Tuskys and Uchumi to cope with competition in an effort to maintain competitive advantage. Increased competition has led supermarkets to initiate response mechanisms to address challenges emanating from changes taking place in the environment among them competitors (new supermarkets, new entrants into the supermarkets sector like hawkers on the streets, small-micro traders operating in mini stalls and Dukas/kiosks and other retail outlets; suppliers; customers; regulatory agencies; and demographic, social, and economic conditions, changing customer needs, technology and controlling operational costs.
The strategies employed by supermarkets focused on specific supermarkets winning strategies such as advertisement, sales promotion, supermarket atmospherics and reward systems (Loyalty Cards) among others. Primary data was collected using oral interview schedule and structured questionnaires targeting supermarket managers and operators of Dukas within the supermarkets environment and from the review of existing literature. Out of the forty two respondents targeted to fill in the supermarkets managers’ questionnaire, 34 filled in and returned the questionnaire for analysis. This was a response rate of 81%. Nakumatt supermarket chain had the highest proportion of respondents at 26%, followed by Tusky’s’ at 24%, while Naivas and Uchumi took the 3rd and 4th position respectively with 17% and 14 % response rates. Out of the a hundred questionnaires administered to Duka owners, eighty six were completed and returned. A response rate of 86% was achieved. The response rate of the two data collection instruments was very good for informing the research findings.
The findings were presented using cross tabulation tables. The study findings revealed that major supermarkets within the large cities in Kenya faced various challenges emanating from the environment. Literature reviewed indicated that competition was the greatest challenge that supermarkets encountered within the retail sector. As a result, the supermarkets have had to adopt winning response strategies unique to the specific supermarket chains to cope with competition within the supermarkets sector. Some of the response strategies adopted included but were not limited to price of goods lower than the competitors, promotion, location and communication mix. Supermarkets should therefore implement winning response strategies which are specific to their supermarkets chain.
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