Supply Chain And Its Effect On Farmers

The grocery industry has a relatively high market commonality; a lot of grocery stores are somewhat related in terms of technologies used, labor force and the products or services offered in the stores. Differentiation with other competitors is key for survival in this highly competitive industry.

1. The grocery industry is a commoditized industry, which makes it difficult for grocers to sustain through differentiation. Buyer power is high and thus, cost leadership and operational efficiencies are critical. There is fierce competition amongst various grocery stores, with the main players such as Loblaw and A&P holding multi-banner stores in various market segments. Traditional grocery stores also lose some of their market share to drug stores, convenience stores and other retailers who have entered the industry. Threat of substitutes from fast-food and take- away outlets is not as prevalent, since many grocery stores have started stocking ready-to-eat meals and have deli services available for consumers. Competitive

In the United States, the food retail industry is absolutely massive. According to Statista, this industry brings in nearly 5.27 trillion dollars annually and 594.4 billion of that is from grocery store sales. In this market, the 20-ton gorilla in the room is Walmart, racking in nearly 20% of the entire market at around 118 billion dollars in 2013 according to the Harvard Business School case study. Following Walmart, Kroger and Costco own the biggest next largest slices bringing in 76 billion and 71 billion respectively. In this highly competitive market that has some of the smallest margins of any industry it can be tough to get ahead and even tougher to grow. However, Trader Joe’s has managed to pierce what was once a very small world

Operating on very thin profit margins, players in the supermarket industry traditionally either focus on a premium segment or follow a discounter strategy at the low end. Premium players address educated and more price elastic consumers who value healthy, natural and organic food; the share of perishable items for these players is normally distinctly higher. Players that focus on a discounter strategy offer a higher share of simple necessity items and value price competitiveness over premium features like healthiness or organic origin. Independently of the focused customer group it is imperative for players in the supermarket industry to be cost efficient and optimize operations

There is a market trend of supply and demand in an economy and this is measured through the equilibrium process and the actors that affect supply and demand. The farmers are the market suppliers and hence they determine their produce by measuring the equilibrium market prices and quantities. The suppliers are aware that when the prices of commodity increases the demand of the same commodity decrease and when demand increases supply decreases until the market reaches an equilibrium point. There are various factors that affect

Barriers will be placed on all new supermarkets entering the sector; this will be from the existing supermarkets. For example Tesco may have cornered the market for certain goods therefore has established a relationship with its supplier so that it will pay a lot less for large volumes of goods whereas the new supermarket will not be able to find cheap, reliable suppliers this gives Tesco's the advantage of economics of scale. A new, small supermarket chain can only buy a relatively small volume of goods, at a higher

It has to be said that global forces play a major role when it comes to the affect it has on the food retail industry. It needs to be said the competition from overseas markets are imminent. Retail giants such as Wal-Mart (U.S.A), Tesco (United Kingdom) or even Aldi’s closest competitor in Germany, Lidl, who have a similar operating structure as Aldi have could buy small to medium sized retail stores in Australia and expand their businesses to the country.

Farm subsidies help farmers to keep the prices of their products low and competitive in the international market. This means that national farmers and their products receive sufficient support and revenue to keep them in business. If this were not the case, there is a danger that retailers will begin to find foreign markets from which to important even basic foods such as corn and meat. The danger here is then that many American

Supermarkets also claim that their economic leverage enables them to benefit local communities by building stores and providing social and economic regeneration packages. One such example is Linwood, on the outskirts of Glasgow (Allen, 2009). The closure of a main employer left the centre of Linwood economically scarred. A proposal to build a new Tesco supermarket in the area and attract other special retailers to the ailing Town Centre was met with enthusiasm by local residents. Supporters of supermarkets advocate that everyone within the supply chain (customers, communities and suppliers) benefit from supermarkets, a concept Dennis Wrong terms the “positive sum game” (Allen, 2009).

Supply and demand are the rulers of price in the capitalist economy of the United States, and farm goods rely on these factors as much as any other commodity. The demand for food remains relatively stable although slightly increasing year to year, but the supply fluctuates greatly depending on

Grocery industry is a highly competitive market with thin profit margins. Super markets are dominant players in the grocery industry. They use grocery offerings to drive traffic to their higher profit margin retail items. With its operations efficiency, Walmart, the largest grocery retailer has been able to offer significant price drops. This also forces other grocery stores to drop prices which keeps the profit margin thin. Even with all the advantages of operational efficiency and economies of scale, Walmart’s share in grocery sales was down at 51% in 2011.

In light of this, I would like to explore research frontiers in the area of the challenges of managing food and farm businesses in a global setting of the 21st Century. In our society beleaguered by agricultural problems that ranges from economic to environmental problems such as weather and global warming, issues concerning trade and management of agricultural enterprises has been the topic of debate for the past decade. Many developing/poor countries who earn their living from agriculture continuously suffer from poverty and hunger as a result of the increasing pressures on the world's resource base. Policymakers are gripped with finding solutions to problems such as structural and technological constraints, inappropriate domestic policies and an unfavourable external economic environment. As a result, the growth of these economies has been slow, undernourishment has been increasing and the marginalization of these countries in the global economy has continued. This trend has created problems for developing countries over the past decade. Economic and financial

There are 92,796 grocery stores in the UK and the market value increase by 19.5% in the last 5 years and according to IGD forecast the UK grocery market should reach £203bn by 2019. But what we can see in the figure 1 that from 2009 to 2014 annual grow in the grocery market start decreasing from 4.9% in 2009 to 2.8% in 2014. One of the reason for this is difficult economic conditions which had an effect for consumer spending. Consumers choose to spend less money on food by buying less food or by looking for cheaper places. Retail market is diversified into three main sectors: Hypermarket and superstores which accounts for 42.3% of retail market, convenience stores 21.4% and small supermarkets 20.3% (Figure 3). So about 84% of sales are done in these three sectors. The biggest 4 retail chains in UK are: Tesco which takes 28.7% market share, Asda has 17.3%, Sainsbury’s 16.6% and Morrison’s 11%. (Figure 2) So, if we will sum up 4 biggest retail market chains we will have about ¾ of market share. Finally, a strong characteristic of this sector is competition with price wars and a

Most of the people of the countryside in the developing nations are farm labourers, cultivators or the small scale producers of manufactured goods and services. There exists an inverse relation between the per capita income of a nation and the size of its rural population. Though a large part of the total population is working and living in rural areas and is engaged in primary activities especially farming, the share of agriculture in gross domestic product has been minimal which is the main reason behind the low income generation in countries with large rural population. This phenomenon clearly draws our attention to one of the most important issues in development i.e. “the pervasiveness of low agricultural productivity”.

Villages comprise the base of Indian society and also represent the real India. It is for these villagers that we need to make sure we build a system that delivers basic social infrastructure in an effective manner. In order to ensure that the fruits of India 's progress are shared by all sections of the society, the government has identified several elements of social and economic infrastructure, critical to the quality of life in rural areas. Its rising middle class demands more than just bread. Food and agricultural operators based in India and abroad are responding to the country’s demands with an array of high-quality food products that contribute to India’s increasing nutritional requirements and add value to India’s agricultural supply chain. However even today there are disparities of development between the rural and the urban sector. In spite of planning, however, the regional disparity remained a serious problem in India. A new controversy in this respect is whether growth rates and standard of living in different regions would eventually converge or not. The convergence postulates that when the growth rate of an economy accelerates, initially some regions with better resources would grow faster than others. But after sometime, when the law of diminishing marginal returns set in, first growth rates would converge, due to differential marginal productivity of capital (higher in poorer regions and lower in