The Expansion of Regional Supermarket Chains and Implications For Local Suppliers: A Comparison of Findings From South Africa, Botswana, Zambia, and Zimbabwe

CCRED Working Paper No. 7/2016

WIDER Working Paper 2016/169

41 Pages Posted: 24 Feb 2017

See all articles by Reena Das Nair

Reena Das Nair

Centre for Competition, Regulation & Economic Development (CCRED)

Shingie Dube

Centre for Competition, Regulation & Economic Development (CCRED)

Date Written: December 2016

Abstract

Since the early 2000s, there has been rapid growth in the number and spread of supermarkets in southern Africa. This paper is a synthesis of key findings of studies undertaken in Botswana, South Africa, Zambia, and Zimbabwe on the expansion of supermarkets and the impact this has had on suppliers and the competitive landscape in the region. Supermarkets are driving trade patterns in processed foods and household consumables within the region, opening up large markets for suppliers. If supermarkets are to become a key route to regional markets for suppliers, national policies and laws that currently exist need to be harmonized across the region with a wider view of developing regional value chains. Among key findings of the studies, supermarket procurement and sourcing strategies as well as buyer power are seen to affect the participation of suppliers in supermarket value chains, and affect the development of their capabilities. The impact on the competitive landscape of the spread of supermarkets in each country is also assessed, highlighting concerns of strategic behaviour that dominant supermarkets can engage in to exclude rivals.

Keywords: supermarkets, regional value chains, strategy, suppliers, capabilities, competition

JEL Classification: L1, L2, L4, L5, L8, O1

Suggested Citation

Das Nair, Reena and Dube, Shingie, The Expansion of Regional Supermarket Chains and Implications For Local Suppliers: A Comparison of Findings From South Africa, Botswana, Zambia, and Zimbabwe (December 2016). CCRED Working Paper No. 7/2016, WIDER Working Paper 2016/169, Available at SSRN: https://ssrn.com/abstract=2923062 or http://dx.doi.org/10.2139/ssrn.2923062

Reena Das Nair (Contact Author)

Centre for Competition, Regulation & Economic Development (CCRED) ( email )

5 Sturdee Ave
Johannesburg, GP, 2196
South Africa

Shingie Dube

Centre for Competition, Regulation & Economic Development (CCRED) ( email )

5 Sturdee Ave
Johannesburg, GP, 2196
South Africa

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