ANALYSIS OF INVENTORY EFFICIENCY AND OPERATIONAL LOSSES ON RETAIL SUSTAINABILITY: A CASE STUDY OF MATAHARI DEPARTMENT STORE TBK (2019-2023)

Abstract

Background: This study explores how efficiency in inventory management and operational losses affect
the sustainability of the retail business at PT Matahari Department Store Tbk from 2019 to 2023. Although
there have been many studies on inventory efficiency and operational losses, the relationship between
the two and the sustainability of retail companies still requires a more detailed explanation, especially in
the context of post- COVID-19 market dynamics.
Purpose: The purpose of this study is to conduct a quantitative analysis of the relationship between
inventory efficiency and operational losses with retail business sustainability indicators measured through
the ESG (Environmental, Social, Governance) index at PT Matahari Department Store Tbk
Methodology: The approach used in this study is descriptive quantitative by analyzing financial ratios
based on secondary data from the company's annual reports for the last five years (2019–2023).
The ratios analyzed include inventory turnover and operating margin. Statistical analysis was applied to
investigate the relationship between these variables and the Composite ESG as a representation of
sustainability
Finding: The findings of this study indicate that inventory management efficiency and operating losses
do not have a statistically significant effect on the sustainability of the retail sector, although there is a
fairly strong relationship between these two variables and the ESG index. The study emphasizes the
importance of aligning operational efficiency strategies with more comprehensive sustainability policies
to improve overall competitive positioning and business continuity
Limitation: First, the analysis only used secondary quantitative data from the company's annual reports
for five years, so social and environmental aspects were not fully accommodated. Second, the study only
focused on two main variables, namely inventory turnover and operating margin, so other variables
that might also affect business sustainability were not included in the analysis. Third, although there is
a fairly strong relationship between inventory and operational efficiency and the ESG index, this
influence is not statistically significant at a 95% confidence level, so the results are limited in explaining
the real impact on the sustainability of the retail sector under review. Finally, market dynamics and
external factors such as changes in consumer behavior and macroeconomic policies pose challenges
that cannot be fully controlled or explained by the quantitative model used. Therefore, the author
recommends that future research expand the scope of variables and use mixed methods to explore
sustainability aspects more holistically.
Originality: The originality of this article lies in its analysis of the relationship between inventory efficiency
and operational losses with retail business sustainability as measured using the ESG (Environmental,
Social, Governance) index at PT Matahari Department Store Tbk during the period 2019-2023. This
research provides new insights by integrating operational financial variables and ESG-based
sustainability indicators in the context of Indonesia's dynamic retail market post-COVID-19 pandemic.
The quantitative approach using secondary quantitative data from annual reports over five consecutive
years and focusing on large national retail companies is a unique strength of this research. Furthermore,
this study highlights the importance of combining operational efficiency strategies with more
comprehensive sustainability policies to enhance business competitiveness and sustainability. By
demonstrating the real relationship between operational variables and ESG indices, this article provides
a relevant and timely contribution to the field of retail management and business sustainability in
Indonesia. This novelty adds to scientific knowledge with a perspective that integrates economic
and sustainability aspects in modern business management.
Keywords: Efficient inventory, Inventory management, Matahari Department Store, Operational losses,
Retail business sustainability