International expansion and retail sales: an empirical study

Abstract

Purpose The purpose of this paper is to examine the effects of international expansion on the sales volumes of large‐scale retailers. Design/methodology/approach Sales data of 200 largest retailers from around the world reported in the 2004 Deloitte “Global Retail Power” survey were analyzed with regression analyses. Findings It was found that: even though internationalization makes a positive contribution to retailers' sales volumes its impact is small; this effect is not impacted by the moderating factor of the degree of retailer specialization along product lines; while another moderating factor, namely the identity of the retailer's country of origin, does make a difference. Research limitations/implications The research methodology and the nature of the data precluded the use of more “soft” measures such as measures of managerial cognitions, perceptions and attitudes to analyze their impact on the effectiveness of internationalization for retailers. The research used cross‐sectional data and further research should compare results in additional time points to capture the possible dynamic changes in this industry. Practical implications Retailers seeking to expand their sales volumes should not rely too much on internationalization but consider also other strategic options. They should therefore analyze carefully whether large investments in overseas operations are justified. This is particularly relevant for US retailers. Originality/value This paper focuses on the issue of internationalization as a viable retail strategy to achieve larger sales volumes. The study reaches its conclusions on the basis of an analysis of data from a large population of diverse, domestic‐only and international retailers from around the world from different sectors and countries of origin, who – the international retailers – operate in different countries.

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