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The rise of supermarkets and their development implications: International experience relevant for India

Author

Listed:
  • Reardon, Thomas
  • Gulati, Ashok
Abstract
"The Indian Council for Research on International Economic Relations (ICRIER) was invited by the Indian Ministry of Commerce and Industry to conduct a study titled “The Impact of Organized Retailing on the Unorganized Retail Sector.” Because organized retail in India is still in its infancy, it was deemed critical to look at the experience of other countries, especially developing ones. Thus, ICRIER sought the assistance of Dr. Thomas Reardon and Dr. Ashok Gulati, co-directors of Markets in Asia, a joint program of the International Food Policy Research Institute (IFPRI) and Michigan State University. ICRIER asked Reardon and Gulati to help research and report on the international experiences in the growth and expansion of modern retailing in developed and developing countries and the implications for India. This report is a contribution to that effort. This paper focuses on the emergence of modern retailing with respect to food and what implications it can have for various stakeholders in the food supply chain. While we briefly review the US and European experience, we focus on the developing countries of Latin America and East Asia (including China), where the supermarket revolution started in the early to mid-1990s. We looked at the patterns of the diffusion process in modern retailing in terms of “waves” that go from country to country, and within a country from first-tier cities to second-tier and then third-tier cities, and from processed to semiprocessed to fresh products. We also treat the challenges and opportunities that modern retailing has posed for various stakeholders in the supply chains, especially for traditional retailers, farmers, and consumers. We also looked at several instances when governments helped small retailers or upgraded wetmarkets by (1) establishing affirmative action policies to strengthen their competitiveness so they could also participate effectively in the transition to modern retailing, and (2) providing compensation to help them change their lines. The paper concludes by surmising what lessons other countries' experiences in the supermarket revolution have for India which is on the threshold of a major structural change in retailing. The expectations and concerns are high. Accordingly, India must form its own model of retail development to meet its priorities, learn from challenges that others have faced, and successful examples of strategies for “competitiveness with inclusiveness” among traditional retailers, wholesaler, and farmers entering an era of rapid retail transformation and concomitant food system change." from Author's Abstract

Suggested Citation

  • Reardon, Thomas & Gulati, Ashok, 2008. "The rise of supermarkets and their development implications: International experience relevant for India," IFPRI discussion papers 752, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:752
    as

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    File URL: https://www.ifpri.org/cdmref/p15738coll2/id/9753/filename/9754.pdf
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    References listed on IDEAS

    as
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    9. repec:bla:devpol:v:22:y:2004:i::p:557-586 is not listed on IDEAS
    10. Daniel Suryadarma & Adri Poesoro & Sri Budiyati & Akhmadi & Meuthia Rosfadhila, "undated". "Impact of Supermarkets on Traditional Markets and Retailers in Indonesia's Urban Centers," Working Papers 646, Publications Department.
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    13. Reardon, Thomas & Timmer, C. Peter, 2007. "Transformation of Markets for Agricultural Output in Developing Countries Since 1950: How Has Thinking Changed?," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 55, pages 2807-2855, Elsevier.
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    Cited by:

    1. Rao, N. Chandrasekhara & Sutradhar, Rajib & Reardon, Thomas, 2018. "Inclusiveness, Technology and Profitability in Supermarkets: SUR Model Results from Semi-Arid Region," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 73(03), July.
    2. Kedar Vishnu & Parmod Kumar, 2019. "Structure and strategy of supermarkets of fruits and vegetables retailing in Karnataka: Gains for whom?," Working Papers 438, Institute for Social and Economic Change, Bangalore.
    3. Yuan, Yuan & Si, Zhenzhong & Zhong, Taiyang & Huang, Xianjin & Crush, Jonathan, 2021. "Revisiting China’s supermarket revolution: Complementarity and co-evolution between traditional and modern food outlets," World Development, Elsevier, vol. 147(C).
    4. Ashok Gulati & Kavery Ganguly, 2010. "The changing landscape of Indian agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 37-45, November.
    5. Hampel-Milagrosa, Aimée & Brankamp, Hauke & Cremer, Thomas & Haddad, Alexander & Pannwitz, Katharina & Wehinger, Franziska & Agasty, Sangeeta & Sarkar, Tamal, 2017. "Retail FDI liberalisation and the transformation of agrifood value chains in India," IDOS Studies, German Institute of Development and Sustainability (IDOS), volume 95, number 95, July.
    6. Smith, Lisa C., 2015. "The great Indian calorie debate: Explaining rising undernourishment during India’s rapid economic growth," Food Policy, Elsevier, vol. 50(C), pages 53-67.
    7. Reena das Nair & Shingie Chisoro-Dube, 2016. "The expansion of regional supermarket chains and implications for local suppliers: A comparison of findings from South Africa, Botswana, Zambia, and Zimbabwe," WIDER Working Paper Series wp-2016-169, World Institute for Development Economic Research (UNU-WIDER).
    8. Vishnu, Kedar & Parmod, Kumar & Neharkar, Pratibha, 2021. "Transaction Costs, Institutional Arrangements and Smallholders Participation: Tomato Marketing By Small Producers in India," 2021 Conference, August 17-31, 2021, Virtual 315151, International Association of Agricultural Economists.
    9. Reena das Nair & Namhla Landani, 2019. "The role of supermarket chains in developing food, other fast-moving consumer goods and consumer goods suppliers in regional markets," WIDER Working Paper Series wp-2019-59, World Institute for Development Economic Research (UNU-WIDER).
    10. Minten, Bart & Reardon, Thomas & Sutradhar, Rajib, 2010. "Food Prices and Modern Retail: The Case of Delhi," World Development, Elsevier, vol. 38(12), pages 1775-1787, December.
    11. Reena das Nair & Shingie Chisoro-Dube, 2017. "The expansion of regional supermarket chains: Implications on suppliers in Botswana and South Africa," WIDER Working Paper Series wp-2017-26, World Institute for Development Economic Research (UNU-WIDER).
    12. Kedar, Vishnu Shankarrao & Kumar, Parmod & Neharkar, Pratibha, 2020. "Do transaction costs prevent smallholder’s participation in Supermarket? Empirical Evidences from India," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304504, Agricultural and Applied Economics Association.
    13. Reena das Nair & Shingie Chisoro, 2016. "The expansion of regional supermarket chains and implications for local suppliers: A comparison of findings from South Africa, Botswana, Zambia, and Zimbabwe," WIDER Working Paper Series 169, World Institute for Development Economic Research (UNU-WIDER).
    14. Joshi, P.K., 2015. "Has Indian Agriculture Become Crowded and Risky? Status, Implications and the Way Forward," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 70(1).

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    More about this item

    Keywords

    Supermarkets; Wholesalers; Modern retail; Small farmers; Traditional retail; Supply chains; Competitiveness; Inclusiveness;
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