Nanostore shopkeepers face complex inventory decisions how to manage their limited cash to acquire products from multiple suppliers. We conduct two studies to understand the drivers of shopkeepers’ behavior. In an empirical study, we find nanostore orders to be severely impacted by supplier visit frequency. In a laboratory experiment, we find that shopkeepers diversify their supply by deviating from optimal replenishment decisions.

Millions of nanostores sell basic items to bottom of the pyramid consumers in emerging markets. Their suppliers struggle with high operational costs because of shopkeepers’ cash constraints. We investigate the impact of trade credits on supply chain performance using difference-in-differences with matching. We find that nanostores receiving a credit transact more often, place larger orders and reject less orders. Trade credits create efficiency gains for suppliers that justify their extension.

We model the competition between online grocery retailers leading to extra emissions from home delivery fleets as a war of attrition. By analyzing the equilibrium strategies of retailers, we estimate the emissions attributable to competition. Our numerical study using data from an online grocery retailer in London shows significant potential for CO2 reduction. Our results can inform policies to reduce the negative environmental impacts of competition in the online grocery retailing sector.