Determinants of Stock-Out in Retail Shops in Ghana: Evidence from Kumasi Metropolis

Abstract

This study investigates factors influencing stock-out occurrence in retail shops in Kumasi Metropolis in Ghana. The study sampled two hundred and forty four retail outlets located in the central business areas of Kumasi Metropolis. A well structured questionnaire was used to solicit information from the respondents. Both descriptive statistics and inferential statistics were used to analyse the data. The results of the study revealed that delay in supplier’s items, demand underestimation, and bad back-of-store practices were the main causes of stock-outs. Generally, the study reveals that most retailers are not equipped to use most of the sophisticated stock control techniques and only limit themselves to the use of stock books to control stock. Information and communication technology and collaboration with suppliers were considered by the retailers as the main stock control implementation barriers. The study concludes that, although retailers are aware of the occurrence and the causes of stock-outs, many of them had done little to put in place measures to control it; and even the few that have been able to put in place stock control measures were confronted with implementation challenges. It is therefore recommended that retailers should adopt effective and efficient stock control techniques to limit out-of-stock occurrence.