Expansion of Modern Grocery Retailing and Trade in - Economic ...
Expansion of Modern Grocery Retailing and Trade in - Economic ...
Expansion of Modern Grocery Retailing and Trade in - Economic ...
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United States<br />
Department<br />
<strong>of</strong> Agriculture<br />
<strong>Economic</strong><br />
Research<br />
Report<br />
Number 122<br />
July 2011<br />
Abstract<br />
A Report from the <strong>Economic</strong> Research Service<br />
Sharad T<strong>and</strong>on, st<strong>and</strong>on@ers.usda.gov<br />
Maurice R. L<strong>and</strong>es, ml<strong>and</strong>es@ers.usda.gov<br />
Andrea Woolverton, woolverton.ae@gmail.com<br />
www.ers.usda.gov<br />
The <strong>Expansion</strong> <strong>of</strong> <strong>Modern</strong><br />
<strong>Grocery</strong> <strong>Retail<strong>in</strong>g</strong> <strong>and</strong> <strong>Trade</strong><br />
<strong>in</strong> Develop<strong>in</strong>g Countries<br />
Over the past few decades, modern grocery retail<strong>in</strong>g has been exp<strong>and</strong><strong>in</strong>g rapidly <strong>in</strong><br />
develop<strong>in</strong>g countries. The implications for food dem<strong>and</strong> <strong>and</strong> trade are <strong>in</strong>fluenced by<br />
the extent to which modern food retailers focus primarily on grow<strong>in</strong>g preferences for<br />
nonprice characteristics, such as dietary diversity, convenience, <strong>and</strong> quality, as opposed<br />
to <strong>in</strong>troduc<strong>in</strong>g supply cha<strong>in</strong> efficiencies that may reduce real food prices over time. Based<br />
on a data set <strong>of</strong> 103 develop<strong>in</strong>g countries, there is suggestive evidence that the expansion<br />
has been associated with growth <strong>in</strong> dem<strong>and</strong> for nonprice characteristics, such as<br />
convenience <strong>in</strong> food shopp<strong>in</strong>g <strong>and</strong> preparation. On the other h<strong>and</strong>, growth <strong>in</strong> modern<br />
food retail<strong>in</strong>g appears to be uncorrelated with variables <strong>in</strong>dicative <strong>of</strong> the emergence <strong>of</strong><br />
more efficient food supply cha<strong>in</strong>s. The impacts <strong>of</strong> modern grocery retail<strong>in</strong>g <strong>in</strong> develop<strong>in</strong>g<br />
countries are potentially important to U.S. agricultural markets. Growth <strong>in</strong> develop<strong>in</strong>gcountry<br />
imports <strong>of</strong> U.S. agricultural products has outpaced growth <strong>in</strong> developed-country<br />
imports <strong>in</strong> the 1990s <strong>and</strong> 2000s, with develop<strong>in</strong>g countries account<strong>in</strong>g for 64 percent <strong>of</strong><br />
U.S. agricultural exports dur<strong>in</strong>g 2007-09.<br />
Keywords: modern grocery retail<strong>in</strong>g, supply cha<strong>in</strong>, efficiency, develop<strong>in</strong>g countries,<br />
food dem<strong>and</strong>, trade<br />
Acknowledgments<br />
The authors thank William Leifert <strong>and</strong> Constanza Valdes, ERS, for contribut<strong>in</strong>g the<br />
sections on Russia <strong>and</strong> Brazil, respectively. Five anonymous reviewers provided valuable<br />
comments <strong>and</strong> suggestions. Dale Simms provided editorial assistance <strong>and</strong> Curtia Taylor<br />
prepared the report for publication.