Retailing And Producer-retailer Relationships In Food Chain
Papers From The 88th Eaae Seminar Paris 2004
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In May 2004, I was invited to give a keynote address on Wal-Mart’s
internationalisation at the 88th seminar of the European Association of Agricultural
Economists (EAAE) in Paris. The theme of the event was “Retailing and
Producer-Retailer Relationships in Food Chains” and six of the papers presented at
the conference are the subject of this issue of the journal.
Martin Hingley’s paper on power imbalanced relationships sets the scene for the
issue. Martin’s work is strongly focused upon the fresh food supply chain in the UK.
Drawing upon in-depth interviews with senior management of fresh food suppliers and
their key customers, the large retail chains, he shows that the imbalance in power in
such relationships does not preclude these companies from entering meaningful
successful relationships. He therefore challenges the more accepted view in the
relationship marketing literature that trust, symmetry and mutuality are necessary
constructs for a successful exchange relationship.
The paper by Andrew Fearne, Rachel Duffy and Susan Hornibrook continues with
this theme. In their paper, however, the focus here was on best practice principles in
relationships between retailers and suppliers of meat, dairy and fresh produce in the
wake of the Code of Practice initiated by the Office of Fair Trading. In a postal survey
to suppliers in these commodity sectors it was interesting to note the degree of
heterogeneity in relationships. Indeed, best practice was achieved by companies with a
low pricing or niche marketing positioning indicating that these companies had
adopted lead suppliers to manage supply chain relationships.
Our next three papers are from France. Dominique Bonet and Gilles Pache´ note that
the concentration of power towards retailers in the food channel is similar in France to
that in the UK. Like their UK counterparts, French retailers (mainly in the trade press)
have espoused their commitment to building close relationships with their suppliers.
The authors interviewed 17 senior managers representing manufacturers, retailers and
a consultant. Using Tropes software to analyse the structure of narrative in these
interviews, Bonet and Pache´ argue that despite the rhetoric of collaboration and joint
problem solving, in practice vertical competition and a commodity marketing
approach is the norm. In their paper, Didier Chabaud and Jean-Marie Codran discuss
such changes as the growth and scale of the French retailing industry but in the
context of retail organisation at the store level. By using the Aokian theoretical
framework they show that the centralisation/decentralisation of management
functions is very relevant to product specificity. Thus an “assimilation” pattern is
evident for branded products compared with an “encapsulation” pattern more suited to
fresh/locally produced products.
The next paper by Sans, Fontguyon and Briz illustrates how stakeholders in the
meat supply chain in France and Spain have tried to restore consumer confidence in the
aftermath of BSE health scares in the 1990s. They chart the impact of these health
scares on consumption and consumer reaction in both markets (less evident in Spain
because actions were already implemented in France earlier). Nevertheless, both
Carrefour and Auchan which operates in both markets have used their quality assurance programmes to differentiate their products and restore consumer confidence
in the retailer’s brand.
Our final paper is from Germany by Astrid Jonas and Jutta Roosen and it focuses
upon private label organic products in the German retail market. They note that the
share of organic product sales lags behind some other countries in Europe, including
their neighbour, Austria. Nevertheless, this is a growing sector and the authors
conducted an online survey of 110 manufacturers and 14 food retailers to ascertain
market developments, retailer strategies towards organic products and relationships
with producers. The survey shows that retailers use organic products as part of a
premium product, image building strategy and there are less stringent “shelf space”
requirements for these suppliers than their branded, non organic competitors.
Previously published in: International Journal of Retail & Distribution Management, Volume 33, Number 8/9, 2005
Emerald Group Publishing Limited
; July 2005
153 pages; ISBN 9781845444419Read online
, or download in secure PDF format
Title: Retailing And Producer-retailer Relationships In Food Chain
Author: John Fernie