E-PROCUREMENT PRACTICES AND PERFORMANCE OF SUPERMARKETS IN NAIROBI CITY COUNTY, KENYA

Abstract

E-procurement is the use of electronic technologies and the internet to carry out procurement functions. E-procurement has made procurement more efficient and competitive globally. Supermarkets in Kenya are a significant part of the wholesale and retail sub-sector, which is one of the biggest contributors to the country's GDP. Despite their significant role in the economy, supermarkets encounter poor management, inventory logistics, supply chain challenges and fierce rivalry from international and local retailers leading to job losses within the supermarket value chain impacting the Kenyan economy negatively.  The general objective was to examine the effect of e-procurement practices on performance of supermarkets in Nairobi City County, Kenya. The specific objectives were to examine effect of e-sourcing and e-tendering on performance of supermarkets in Nairobi City County, Kenya. The study was guided by the dynamic capability theory and innovation diffusion theory. The study employed a descriptive research design. The study targeted 9 large supermarkets in Nairobi City County. The unit of observation was the procurement and accounting managers in the branches hence a total of 144 respondents. The sample size of was determined using census hence all the 144 respondents were sampled. The study used primary data collected using questionnaires. The study carried out a pilot test with 14 management staff in procurement and finance departments. This study employed construct and content validity. Reliability was tested using Cronbach’s Alpha Coefficient. Data was analyzed using SPSS Version 28. Descriptive and inferential statistics were used. The descriptive statistics included frequency, percentage, mean, and standard deviation while inferential statistics included correlation and regression. Study results were presented in tables. The findings revealed that e-sourcing and e-tendering had statistically significant and positive effects on performance. Among these, e-tendering emerged as the strongest predictor of performance (β = 0.314), followed by e-sourcing (β = 0.278). These results confirm that while all practices contribute meaningfully, e-tendering has the most substantial impact in driving improvements across financial, operational, and customer-related performance metrics. The study concludes that supermarkets with more advanced and integrated e-procurement systems—especially those that emphasize digital tendering—tend to perform better overall. It is therefore recommended that supermarket managers prioritize the enhancement of e-tendering systems and ensure consistent use of e-sourcing tools across branches. Investments in digital infrastructure, system security, and staff capacity-building will be critical for optimizing procurement performance and sustaining competitive advantage in the retail sector.

Key Words: E-Procurement Practices, E-Sourcing, E-Tendering, Performance, Supermarkets