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  • Institute of Food, Nutrition and Human Health

    Paper 119.180

    August 2012

  • Retail industry- historical development

    Pre-development before 1945

    Customer service is great and relationships are important

    Food is large part of the family budget

    Sopping is social event, source of information

    Development (past war) 1945-1975

    Technology innovations TV and radio

    Regional brand become national brands

    Shopping changes from daily to one week

    The customer become consumer

    Mass market model appeared

  • Retail industry- historical development

    Saturation 1975-1990

    Too many stores, too many products, too many logistics systems, too any deals

    Sameness in the industry

    Money more important than customer service

    Decline 1990-1999

    Food away from home (50% of all food consumed in the US in the mid 1990s is prepared outside home)

    Shopper loyalty

    Concentration and globalisation

  • Big achievements in retail industry

  • Supermarketisation in developing countries

    Demand by consumers for supermarket services

    Demand incentives - urbanisation; women into workforce, demand for convenience and processed

    food, reduces prices

    Demand capacity increased incomes, rise of middle class, increased demand for processed food,

    greater variety with lower price, refrigeration


  • Supermarketisation in developing

    countries - cont

    Supply of supermarket services

    Supply incentives - slow development before1990s, saturation and intense competition in the home

    markets, higher margins and weak competition in

    developing countries. (early entree better locations)

    Supply capacity liberalisation of FDI in retail, retail procurement, logistics technologies and inventory

    management were revolutionised in 1990s

  • Supermarketisation in developing


    First wave major cities in larger or richer countries of Latin America

    Second wave East/Southeast Asia and Central Europe

    Third wave small or poorer countries of Latin America and Sothern and Eastern Africa

    Fourth wave South Asia and Western Africa

  • Supermarket development in Central and

    Eastern Europe (CEE)

    First wave mid 1990s Northern CEE countries (Czech Republic, Hungary, Poland, Slovakia) with share of supermarkets in food retail is about 40-50% in 2003

    Second wave southern CEE (Croatia, Bulgaria, Romania, Slovenia) with share of supermarkets in food retail is about 25-30% in 2003 and growing rapidly

    Third wave Eastern Europe - with share of supermarkets in food retail in Russia is about 10%

  • Supermarket development in Asia

    First wave early 1990s East Asia (Korea, Taiwan with share of supermarkets in food retail

    is about 50-60% in mid 2000s

    Second wave late 1990s Southeast Asia (Indonesia, Malaysia, Thailand) with share of

    supermarkets in food retail is about 30-50% in

    mid 2000s

    Third wave early 2000s China, India, Vietnam with share of supermarkets in food retail

    is about 2-20% in mid 2000s, supermarket sale

    growing 30-50% a year in China

  • Key points of supermarket development

    From earliest to later adopter of supermarket, reflecting income, urbanization, infrastructure and


    Large differences between sub-regions and countries

    Slower growth in the supermarkets share of fresh food

    Supermarket sector is increasingly multinationalised and consolidated

    Spread among richer, middle and poor costumer segments and big and small cities and towns

  • Key points of supermarket

    development cont

    Objectives of supermarket chains

    Qualitative to increase quality and safety of the products

    Quantitative to reduce costs and increased volume procured

    Shifting from old procurement model based on sourcing products from traditional wholesalers

    and wholesale markets to a new procurement


  • Four pillars of a new kind of

    procurement system

    First pillar towards centralisation and regionalisation of procurement

    Second pillar shift towards use of specialised wholesalers and logistics firms

    Third pillar - towards preferred-supplier system

    Fourth pillar the rise of private standards

  • Retail industry in NZ

    Source: New Zealand Retailers Association, 2010

    Total retail outlets by regions - 2010

  • Retail industry in NZ - Retail outlets by store

    type - 2010

  • Retail industry in NZ

    Retail sales by sector 2010, ending March 2010

    Source: New Zealand Retailers Association, 2010

  • Food retailing structure in NZ 2010 and 2004

    Source: New Zealand Retailers Association, 2010; NZ Institute of Economic Research (NZIER)

    Note: Values of sales




    4% 7%

    Supermarket and grocery stores ($15288m)

    Fresh produce ($963m)

    Liqour retailing ($1250m)

    Other food retailing ($749m)

    Takeaway food retailing ($1327m)



  • The top 10 retailers by sales by year

    ending 2008

    Source: New Zealand Retailers Association, 2010


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