Content area
Full text
Introduction
Retail is often regarded as one of the most important sectors of the world economy. In Brazil, growth in this sector exceeded GDP growth in the years 2014 and 2015 (IBGE, 2016). The gross sales of the 250 largest retail networks in Brazil exceeded $137bn in 2014, according to a survey by the Brazilian Retail and Consumer Society (SBVC, 2016).
In general, a large part of retail activity is still linked to the physical environment. The physical store remains the main distribution channel for retail companies and is an important source of competitive advantage (Turley and Chebat, 2002). To ensure competitiveness and reach the target market, retail organisations often remodel their retail stores. This remodelling focusses on the retail store as a strategic resource, creating an atmosphere that influences clients and workers (Bitner, 1986; Turley and Milliman, 2000; Baker et al., 2002), and can lead to a sustainable competitive advantage (Wernerfelt, 1984; Barney, 1991). Mann et al. (2015) found that remodelling strategies are used by retail companies in recessionary times to survive and to increase the competitive potential of the company.
Focussing on remodelling strategies, several studies (e.g. Brüggen et al., 2011; Dagger and Danaher, 2014; Ferraro et al., 2017) have examined how this retail strategy influences customers using measures based on their perspective. Dagger and Danaher (2014) verified that a remodelling strategy can increase sales, particularly by attracting new customers (vs existing customers). In another study, Brüggen et al. (2011) found that remodelling strategies have only a short-term effect in retail; that is, after six months, the average in-store spending tends to return to the previous baseline. Ferraro et al. (2017) verified the effects of store remodelling on customers’ measures such as satisfaction, positive word of mouth and loyalty. Additionally, Ferraro et al. (2017) measured stores’ sales performances before and after the remodelling. None of these studies, however, has focussed on understanding how reformulation strategies can influence store performance when measured by strategic dimensions from their managers’ perspectives.
To fill this gap and verify the effect of remodelling strategies on stores’ strategic performance, from the view of their managers, this study analyses the performance of retail companies by applying the balanced scorecard (BSC) perspectives (Kaplan and Norton, 2006) – financial,...