CHANGE IN FOOD RETAILING: SUMMARY
The description so far of the process of change in food retailing has pointed both to the major functional areas of retail business activity and to some of the changes that have been taking place in the sector. Any analysis of major recent trends in retailing (see the box below) produces quite an extensive list of transformations and issues.
The listing in the box is readily recognizable in developed economies, but similar trends are now being found in many economies (Dawson and Burt, 1998; Dawson et al, 2003; Larke and Causton, 2005; Seth and Randall, 2005). We can, however, condense this listing into three key areas.
First, it is clear that we have in recent decades lived through an enormous change in the location of retailing. Food retailing takes place now in very different locations from previously. We have already discussed the broad trends of decentralization of retail location and the rise of superstores. Retailing has been locationally transformed. From achannel perspective this may have had advantages for the distribution of fresh food products.
Secondly, there has been an alteration in the format through which food retailing takes place. Shops today are not like shops of previous times, and retailer strategies have become more segmented. They differ in scale, design, technique and approach. This is obvious in terms of the larger store formats, but is equally true for smaller formats. A common component, however, is the improvement in the quality of provision.
Thirdly, it has been emphasized that food retailers have increased in scale and power (Burt and Sparks, 2003; Seth and Randall, 1999, 2005). They have grown enormously in size and now are major businesses in their own right, often being larger than the manufacturers who supply them. They can thus reorganize various relationships to suit themselves. This scale of operation brings practical and financial benefits to the business. Recently, we have seen the scale increase another level with major mergers or takeovers on the international stage, eg Wal-Mart of Woolco in Canada, Asda in the UK and Seiyu in Japan; the merger of Carrefour and Promodès in France; and the expansion of Ahold and Delhaize across the world (though scale alone may not always guarantee success). The world’s leading retailers are now amongst some of the biggest organizations around and have an increasingly international approach. Their professionalized management approach has changed the sector and its supply systems.
One of the key themes that implicitly underlies this chapter is that, if there has been a transformation at the retail shop end of the channel, then there has to be a transformation in supply systems as well (Sparks, 1998). To meet consumers’ demands for new products in new formats and in new ways, the supply system has had to be reorganized and refocused. This reorganization is needed because the nature of retailing and supply has changed. Retailers through their knowledge of consumers have gained power and used this power in a variety of ways. One of these methods has been through the reorganization of fresh food channels and the adoption of supply chain management prin-ciples to gain efficiency and effectiveness. It is to this that we now turn.