The implications for suppliers of the spread of supermarkets in southern Africa |
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Authors: | Reena das Nair Shingie Chisoro Francis Ziba |
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Institution: | 1. Centre for Competition, Regulation and Economic Development (CCRED), Department of Economics and Econometrics, University of Johannesburg, Johannesburg, South Africareenadn@uj.ac.za;3. Centre for Competition, Regulation and Economic Development (CCRED), Department of Economics and Econometrics, University of Johannesburg, Johannesburg, South Africa;4. Zambia Institute for Policy Analysis and Research (ZIPAR), Lusaka, Zambia |
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Abstract: | ABSTRACTThe growth of supermarkets in southern Africa opens local and regional markets to suppliers through participation in supermarket supply chains. Supermarkets in the region provide an important route to market for processed foods and household consumable products. Through a regional value chain lens, this article provides an assessment of the implications of the growth of supermarkets for the participation of suppliers in Botswana, South Africa, Zambia and Zimbabwe. The research finds that, while supermarkets provide important opportunities for suppliers, they also exert considerable buyer power that limits supplier development and upgrading. High private standards, onerous requirements and costly trading terms negatively affect supplier participation in value chains. Long-term investments are required to build the capabilities of suppliers to meet supermarket requirements in terms of quality, consistency, volume and cost-competitiveness. |
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Keywords: | Supermarkets suppliers regional value chains buyer power capabilities |
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