Economic efficiency in supermarkets: evidences in Spain

Abstract

PurposeTo estimate the economic efficiency of supermarket chains in the Spanish retailing industry.Design/methodology/approachThe methodology applied is based on the non‐parametric technique of data envelopment analysis. The empirical application is carried out on a sample of 100 supermarket chains between 1995 and 2001.FindingsThe results reveal high levels of economic inefficiency in the Spanish retailing sector.Research limitations/implicationsThe generalisation of the conclusions of the study to the whole sector should be made with caution, given the fact that only one of the players in the channel of distribution has been analysed.Practical implicationsEfficiency analysis facilitates the management of the intermediaries themselves at a horizontal level, allowing the realisation of “benchmarking” analysis. Producers can also identify the efficient retailers, what could be useful for vertical relationships in the channel.Originality/valueFor the first time, this study analyses the economic efficiency of the intermediaries in the Spanish retailing sector.