An investigation into how the macro-economic environment affects profitability of the supermarket industry in Zimbabwe: A case of spar Zimbabwe (PVT) LTD

Abstract

iv ABSTRACT Based on the vital contribution of supermarkets on the distribution chain, the aim of study was to ascertain how macroeconomic factors affect profitability of supermarket businesses with SPAR Zimbabwe being the case study. SPAR Zimbabwe, a retail chain has been operational for more than five decades. The research aimed at understanding how the business challenges caused by the country’s macroeconomic environment affect the business operations of supermarkets. This is because many businesses in the country have been shutting down and reducing operation capacity citing macroeconomic challenges to be the major cause. The study relied on primary data that was collected from a carefully non- probabilistic chosen sample (purposive sampling) of 212 employees who were at least on a supervisory level. Data was analysed using SPSS Version 24. The research instrument passed the internal consistency tests as measured by the Cronbach’s alpha coefficient and normality tests conducted that showed that data was not normally distributed. Since the data was not normally distributed, Spearman’s rank correlation analysis (non-parametric) was performed to check the strength and direction of the association between the macroeconomic variables and profitability. Regression analysis helped to ascertain the causal relationship between macroeconomic variables and profitability. By employing descriptive statistics, correlation and regression analysis the research concluded that inflation, unemployment and exchange rates had positive influence on supermarket profitability. Both Interest rates and economic growth had no impact on supermarket profitability. Essentially, the research findings were consistent to literature. The main recommendation from the research was that supermarket management must be conscious of the macroeconomic statistics if they are to improve or maintain profitability of the business to which they are stewards. Improvement of shareholders wealth in the supermarket business is highly dependable on the macroeconomic environment and management cannot afford to be ignorant on issues of macroeconomics.