Analysing supermarket performance with the high-performance organisation framework

Abstract

Purpose The Dutch supermarket industry is dominated by a small number of powerful companies which capture the majority of sales and which compete fiercely with each other. This competition is mainly quality based, in the sense of offering increasingly more products of higher quality and striving for better distribution mechanisms. Interestingly there does not seem to be much attention for the quality of the internal supermarket organisation, i.e. quality of people, internal processes, and performance reporting. Thus there seems to be a gap in both current literature and the quality improvement attention of supermarkets which needs to be addressed, to uncover new sources of improvement. The paper aims to discuss these issues. Design/methodology/approach In this paper, the authors introduce the high-performance organisation (HPO) framework, a validated technique for evaluating the strength of the internal organisation of companies and for proposing quality improvements. The aim of the research is to test whether the HPO Framework can be used to analyse the strength and performance of supermarkets and to come up with recommendations for improvement. A questionnaire into the drivers of success of supermarkets was constructed which was send to 400 supermarket franchisers, and the received data were subsequently analysed. Findings On average the participating supermarkets are well-performing but they cannot yet be classified as high performing according to the HPO Framework. The supermarkets with the highest HPO scores indeed achieve better financial results (both in terms of revenue and margin achieved) than those of supermarkets with lower HPO scores. Finally, the authors find that larger supermarkets (in square metres floor area) outperform smaller supermarkets on all HPO factors. Research limitations/implications As the HPO Framework is shown to be useful for not only analysing the performance of the supermarkets but also to generate recommendations for improvement of those supermarkets, individual supermarkets should evaluate their performance and operations using the HPO Framework to come up with improvement recommendations tailored to their own situation. Originality/value The HPO Framework has been applied during the past years in many sectors but not yet in the supermarket industry. Thus this research provides a unique insight in this industry. In addition academic researchers can use the HPO Framework to further investigate specific areas and factors of the supermarkets, in order to add to the literature on the quality of supermarkets.