Independent Retailer Restocking Choices in Urban Goods Movement and Interaction Effects with Traditional Markets

Abstract

AbstractTraditional markets play a key role in local supply chains in many countries, often influencing retailer decisions due to their inherent attractiveness. In contrast to restocking choices for retailers as part of large chains, choices of independent retailers driven by local traditional markets have not been widely researched and are not well understood. This paper analyses the factors influencing independent retailer restocking choices and investigates the interplay between the presence of traditional markets and retailer choices. Bandung city in Indonesia is chosen for the study where independent retailers are prevalent, and where a number of traditional markets are thriving. A retrospective questionnaire was used to capture independent retailer restocking behaviour and generation models were calibrated to arrive at the trip propensity. Discrete choice models were estimated to explain the retailer preferences for supplier location and transport service choice. Results indicate that trips generated by independent retailers are explained by the presence of traditional markets and retailers’ vehicle ownership, in addition to the standard variables such as number of persons employed, weekly goods demand and average shipment weight. As for restocking location choice, retailers are more likely to choose suppliers within a traditional market where the number of wholesaler units is larger. Furthermore, the choice of traditional markets has a positive influence on whether retailers choose to use their own vehicle to restock their shops.