The Supermarket Revolution in Developing Countries: Policies to Address Emerging Tensions Among Supermarkets, Suppliers and Traditional Retailers

Abstract

Supermarkets (short for all modern retail) are spreading quickly in developing countries. The ‘take-off’ occurred as recently as the early to mid-1990s, driven by an avalanche of foreign direct investment (FDI) sparked by retail FDI liberalisation. A decade on, the power and dominance of supermarkets is already felt in the food markets of many developing countries, and tensions between supermarkets and traditional retailers, and supermarkets and their suppliers, are emerging as key policy and political debates. This paper analyses those tensions. It then reviews the US and Western European history and current experience in designing policies (regulations and support programmes) to address those tensions. It ends with an analysis of emerging policy approaches to the supermarket sector and the tensions its growth is creating in developing countries, and recommendations. Les supermarches (terme adopte pour tous les modes de distribution modernes) s'etendent rapidement dans les pays en developpement. Le « dec...