Distant geopolitical unrest and retail sales

Geopolitical unrest can lead to retail revenue losses and store closures. For firms dealing with the cascading challenges of such unrest, the current study offers timely empirical insights into the domino effects of unrest on a distant emerging market that is neither an ally nor closely connected to the focal unrest countries. With large-scale data before and during the Russo-Ukrainian war involving 2.9 million retail transactions and 831 brands in Bangladesh, a largely overlooked emerging market, the current research seeks to answer three important questions: To what extent does unrest affect retail sales revenue in a distant country and does brand assortment-a mediator with actionable implications-explain this relationship? Does the effect of unrest on assortment differ according to brand type (i.e., foreign brands, global market leaders, and private labels)? How do various strategies of brand activism influence the effect of unrest? The findings reveal that unrest affects retail sales revenue negatively, through assortment, but these negative effects are moderated by brand type. Foreign brands and private labels can maintain or even expand assortment, but global market leaders struggle to do so. Moreover, substantial brand activism can attenuate the negative effect of unrest on assortment. These findings extend literature that investigates mechanisms over which retailers have little control (e.g., macro environment, ideology). By introducing a new mechanism that retailers and brands can influence (i.e., brand assortment), this study offers strategic marketing implications for retail and brand managers, who can better protect themselves from unrest in distant markets.