Institute for Social and Economic Change
Working Paper: 438
Structure and Strategy of Supermarkets of Fruits and Vegetables Retailing in Karnataka: Gains for Whom?
Indian Modern Food Retail Chains (MFRC) have been growing the fastest in developing countries for the last two decades. What impact will it have on existing fruit and vegetable (F&Vs) supply chains, procurement price offered to farmers and consumers’ purchase prices? How do the MFRC expand their business and what strategy do they adopt? This paper analyses the evolution of MFRC, particularly during the last two decades. Further, the paper traces the current structure and expansion of retailing through supermarkets in India and discerns the strategy of the retail chains and price spread in F&Vs. The paper is based on primary survey and data were collected in 2016-17 in Bangalore, Karnataka. Field findings show that domestic modern retailers resort to joint ventures with other international companies mainly for utilising their international experience, expertise in brand development and retail led technological development. The authors noted that the MFRC have shifted away from the use of spot markets towards purchasing directly from the farmers for differentiating their product from traditional retailers, maintaining higher product quality, consistency and cutting costs in order to compete with the traditional players and wet markets. The paper concludes that most of the F&Vs and MFRC offer higher prices to the farmers as compared with traditional and spot market prices.