The Impact of Store-Unit–Community Racial Diversity Congruence on Store-Unit Sales Performance

Abstract

We introduce the racial diversity congruence concept to examine how matching levels of racial diversity between store-unit employees and community members relate to store-unit sales performance. In a field study of 220 retail store units, we found evidence supporting social identity theory and information-based perspectives on the racial diversity congruence–sales performance relationship. Specifically, results show that a match between store-unit racial diversity and community racial diversity positively related to store-unit sales performance. In addition, superior store-unit performance emerged when store units and communities had congruent levels of diversity at high (i.e., high-high racial diversity congruence) rather than low (i.e., low-low racial diversity congruence) levels. Moreover, we found asymmetrical incongruence effects whereby racially diverse store units in less-diverse communities outperformed store units with lower levels of racial diversity operating in diverse communities. The implications of our results are discussed in light of study limitations and future research needs.