Supermarket Buying Power, Global Commodity Chains and Smallholder Farmers in the Developing World

In recent years there has been both expansion and consolidation of the global supermarket sector… Supermarkets now dominate food sales in developed countries and are rapidly expanding their global presence. At the same time, international mergers and acquisitions and aggressive pricing strategies have concentrated market power in the hands of a few major retailers. The late 1990s saw a flurry of merger and acquisition activity as the supermarket sector rapidly consolidated to counter the ‘Wal-Mart’ threat. The UK food retailing industry is now dominated by four major supermarkets (Tesco, Asda, Sainsburys and Morrisons) who together account for over two-thirds of retail food sales. The consolidation of retailers has strengthened their control over suppliers. Sector analysts predict that it is not unrealistic to imagine future global markets in which food retail is controlled by four to five global firms with a handful of regional and national companies, and in which food manufacture is dominated by some ten companies using only about 25 brand names.