University of
Washington
Geography 350
Trends
in
food retailing
BACKGROUND
What
are
key corporate ASSETS in retailing of foodstuffs?
- inventory
- real
estate
- trade
names,
reputation, goodwill
- proprietary
technology
(e.g., for managing inventory and supply chains)
What
are
key aspects of the ENVIRONMENT facing foodstuff retailers?
- They're
selling
mainly commodity products -- products sold by many other
retailers.
- Consumer
disposable
income varies across places and fluctuates over time, beyond
the control of the retailer.
- The
degree
of competition varies
across
places and fluctuates over time, beyond the control of the
retailer.
The
task
of retail management is to establish corporate, business
(competitive), and functional (such as marketing) STRATEGIES that
maximize returns on assets by (a) modifying assets and (b) selecting
environments for which the assets are best suited.
TRENDS
Consolidation, including across national borders
Trends
Effects on prices
Horizontal integration, usually within individual
outlets
Specialization of retail formats
Success factors
Regulation
Regulation can be defined
as the control of human or organizational behavior.
Despite the prescence of free will, we talk about "control" when there
is a readily identified cost of mis-behaving. (C.f. "institutions.") Thus,
there are many sources of regulation, including:
- Government regulation, which carries penalties
such as fines or imprisonment.
- Contractual regulation, which carries penalties
such as lawsuits.
- Financial regulation, by which I'm not referring
to the governmental regulation of financial companies, but to the ways
that financial arrangements and requirements regulate behavior.
The penalty for mis-behaving might be an adult's losing parental
financial support, or the individual's or company's inability to get
access to credit (because of a prior bankruptcy or poor management), or
the inability to get mortgages for property in certain neighborhoods
("redlining") or not built to certain specifications.
- Social regulation, which carries penalties such
as disapproval by people on whom we rely for friendship or social
identity.
Location and competition
New considerations in
the site-location decision
The Wal-Mart effect
Food deserts: areas or communities that lack stores
selling healthy food [State Legislatures 2010]
The future
- How might a sustained
increase in fuel prices affect the location of supermarkets?
- How might a sustained preference toward local or
regional products affcet the location of supermakets?
- Using the definition and types of regulation noted above, what regulatory changes
might increase the demand for and supply of fresh foods in what are
currently food
deserts, including for urban consumers without cars?
NOTE
"Food deserts are areas or communities that lack stores selling healthy
food; some states have established public [lending] pools that
match much larger private investments" [State Legislatures 2010].
REFERENCES
Huang, C.L., Epperson, J.E., Cude, B.J. and Woo, B.J. 2002.
Wal-Mart supercenter: the new low-price food retailer in town. Choices: The Magazine of Food, Farm and
Resource Issues 17(3): 6-12.
Major, M. 2005. Brewing distinction: with coffee,
doughnuts, and strong sales, branded in-store cafes are becoming
integral to destination-oriented retailing. Progressive Grocer 84 (10): 66ff.
McTaggart, J. 2004. Sites for sore eyes. Progressive Grocer 83(7): 26-32.
Pearce, J., Blakely, T., Witten, K., and Bartie, P. 2007.
Neighborhood deprivation and access to fast-food retailing: a national
study. Amer. J. of
Preventative Medicine 32(5): 375-82.
Seth, A. 2001. Who will win in global retailing? European Business Forum 6: 64ff.
Smith, H. 2006. Store characteristics in retail
oligopoly. Rand Journal of
Economics 37(2): 416-30.
Stanton, J. 1999. Rethinking retailers’ fees. Food Processing 60(8): 32-3.
State Legislatures.
2010.
States water food deserts. Vol. 36(1): 9.
Steigert, K.W. and Sharkey, T. 2007. Food pricing,
competition, and the emerging supercenter format. Agribusiness 23(3): 295-312.
Thomas, C.J. and Bromley, R.D.F. 2003. Retail
revitalization and small town centres: the contribution of shopping
linkages. Applied Geography
23(1): 47-71.
Wrigley, N. 2002. Transforming the corporate landscape of
US food retailing: market power, financial re-engineering and
regulation. Tijdschrift voor
Economische en Sociale Geografie 93(1): 62-82.
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