The Effect of Inventory Management on Performance of Selected Naivas Supermarkets in Nairobi City County, Kenya

Electronic supply chain management has emerged to be a core area and source of implementation in contemporary business environments, especially the retail sector. Naivas supermarket has continued to rely on the traditional supply chain which has caused it not to achieve its optimum performance as concerns market penetration, sales revenue actualization, customer fulfilment, and right-time delivery. The study investigated the role of inventory management as an aspect of electronic supply management on the performance of the retail sector in Nairobi County, Kenya. The study settled on a descriptive research design to investigate a sample size of 137 staff members from 8 randomly selected Naivas supermarkets in Nairobi city county. Semi-structured questionnaires were utilized to gather first-hand data from targeted respondents. Reliability and validity in this study was also determined. Reliability was examined using a threshold of 0.70 of the Cronbach alpha value. The element of inventory management practices exceeded the threshold and thereby deemed reliable. Quantitative analysis revealed that inventory management (β=0.342, p=0.031) showed moderate impact, limited by partial manual processes. To enhance performance through inventory management practices, Naivas should prioritize full automation of inventory tracking using IoT and AI-driven systems, building on the moderate but significant impact found in the study. Implementing vendor-managed inventory with key suppliers would further optimize stock levels, leveraging the strong correlation between SRM and inventory efficiency. Additionally, staff training programs should be introduced to ensure seamless adoption of these technologies and address residual manual verification issues noted by respondents. Future research should explore long-term digital transformation outcomes and AI/blockchain applications in Kenya’s retail sector.