Evaluating the effectiveness of activity-based costing for costefficiency in South Africa Retailers

In today’s highly competitive retail landscape, cost efficiency remains a critical determinant of long-term sustainability. Despite significant advancements in cost accounting techniques, many South African retailers still rely on traditional volumebased costing methods that inadequately reflect the actual resource consumption of products and services. This study evaluates the effectiveness of Activity-Based Costing (ABC) in improving cost efficiency across various retail enterprises in South Africa. Drawing on both quantitative and qualitative data, the research employs a mixed-methods approach to assess how ABC affects cost allocation accuracy, operational performance, and financial decision-making. A purposive sampling technique was used to select a representative sample of registered retail firms identified through the CIPC databases. Structured questionnaires and semi-structured interviews were conducted with financial professionals who are familiar with ABC implementation. Quantitative data was statistically analysed to detect patterns, correlations, and measurable impacts of ABC on cost efficiency, while qualitative insights will enrich understanding of contextual and strategic challenges surrounding adoption. The study is grounded in Cost Behaviour Analysis theory, which underscores the dynamic relationship between operational activity and cost drivers. Preliminary findings from similar international studies have shown positive correlations between ABC and improved cost control, profitability, and resource allocation. However, limited research exists on the localised effectiveness of ABC in the South African retail context. This study fills that gap by offering empirical evidence and practical insights for retail decision-makers, policymakers, and accounting professionals seeking to adopt more accurate and adaptive costing models. The research aims to promote financial resilience and strategic competitiveness in an increasingly volatile economic environment.

Author dc:creator

• Rasisi, Mufunwa Takalani

Advisors dc:contributor.advisor

• Reynolds, A.
• Munkuli, C. A.

• Activity-based costing (ABC)
• Cost Efficiency
• Financial Performance
• South African Retail Sector
• UCTD

Statement dc:rights

• University of Venda

Language dc:language.iso

en

Repository record dc:identifier.uri

https://univendspace.univen.ac.za/handle/11602/3265

OAI identifier oai:identifier

oai:univendspace.univen.ac.za:11602/3265