Analysis of Distribution Channels’ Successfulness –The Case of the Retail Chains in the Republic of Serbia

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Abstract

The importance of distribution channels comes from the increasingly sophisticated consumer demands, producer’s focus on core competences, and the contribution of the distribution channels to achievement of goals at the national economy level. Due to the fact that intermediaries of distribution channel have the role to link producer and consumers, the results of their functioning have a direct impact on the mentioned partners in the channel. Therefore, the efficiency of the intermediaries directly affects the performance of related partners, producers and consumers. Retailers, as intermediaries in the channel, attracted great attention due to their leadership position and power, which proceed from direct communication with consumers. In this regard, the objective of the research presented in this paper is the analysis of the importance of distribution channels, from partners’ point of view, as well as from macro aspect, with special reference to the retailers, as the primary participants in the distribution channel, in the Republic of Serbia. As indicators of performance, authors use Return of Sale (ROS) and Return of Equity (ROE). By applying the regression analysis, the authors examine whether the performance and role of retail chain leaders in distribution channels depends on the size of the sales network, or the number of sales facilities. The survey shows that the largest retail chains in the Republic of Serbia are performing below the average for the retail sector, and that the size of their retail network has a significant impact on the achieved results.

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