The internationalisation of supermarkets, the nature of competitive rivalry between grocery retailers and the implications for local suppliers in Southern Africa

Abstract : The growth and spread of supermarket chains globally has transformed how consumers purchase groceries and household consumable products and how these supply chains have developed. This thesis analyses the spread of supermarket chains in Southern Africa, with a specific focus on South Africa, Botswana, Zambia and Zimbabwe. It analyses how the internationalisation of supermarket chains in these countries has affected, and is affected by, competition dynamics and what the implications on suppliers are. This study is among the first to assess these topics in Southern Africa, particularly the implications on the competitive landscape and the effects of market power of supermarket chains on rivals and suppliers. The thesis draws on a critical review of the literature on industrial organisation-based theories of foreign investment and Ownership-Location-Internalisation (OLI) principles to understand the patterns of supermarketisation and internationalisation in the region. It identifies the significance of national policies, political economy dynamics, proximity to suppliers and firmspecific strategies related to market power in understanding the spread of supermarkets. A key finding is that internationalisation has not been to the extent that the literature predicted, including the entry and growth of transnational retailers in Southern Africa. What is seen instead is the ‘regionalisation’ of South African supermarket chains, essentially extending their home networks and oligopolistic rivalry into the region. The thesis also identifies the resilience of alternative forms of retail through buying group-led independent retailers in South Africa, alongside supermarketisation that started in the apartheid period. The complexities of how supermarket chains compete and how market power is exerted affects their spread. The study examines the impact of market power of supermarket chains, showing that competition needs to be understood narrowly by format and segment in very localised markets, possibly limited to a shopping mall in the South African context. Importantly, the analysis reveals the shortcomings of viewing competition through just a price lens and highlights the importance of understanding non-price dimensions of competition, given the characteristics of supermarkets and the way in which the positioning of supermarkets changes over time. This requires a more dynamic perspective. Through extensive firm-level and organisation interviews in each country, the thesis evaluates the impact on suppliers through a combination of a global value chains framework and industrial organisation principles of competition in markets. The forms in which buyer power is exerted in Southern Africa and the impact that this and other requirements has on regional supplier development is evaluated. It finds that supermarket chains are important in driving the upgrading of supplier capabilities to meet these requirements by providing access to wider ii markets, facilitating their climb up a regional or global value chain ‘ladder’. The study however also finds strong concerns of buyer power imposed through the trading terms negotiated with suppliers. As gatekeepers to store networks in the region, supermarkets offer suppliers the opportunity to access more consumers. However, unequal bargaining power leads to rents extraction from value chains by supermarkets, negatively affecting supplier participation and upgrading. The thesis shows that these topics are complex and inter-related, requiring multiple lenses to analyse them. Supermarketisation and internationalisation affect the structure of markets and the competitive landscape, while the degree of competitive rivalry and market power in turn impacts the pace of supermarketisation and internationalisation. Similarly, the market power of supermarket chains has a significant impact on suppliers, while the ability of supermarkets to grow into new markets hinges on the proximity and links to well-established supplier networks.D.Phil. (Economics

The expansion of regional supermarket chains: Implications on suppliers in Botswana and South Africa

This paper explores the effect of the spread of supermarkets on the participation of suppliers in supermarket value chains in Botswana and South Africa. Using secondary data and in-depth interviews with key players in the value chain, the paper evaluates the buyer power of supermarkets evidenced in the negotiation of trading terms. It further assesses the capabilities and investments required by suppliers to access shelf space and remain competitive. Finally, the paper looks at the role of supermarkets and governments in developing local supplier capabilities and the importance of harmonizing policies across borders

The expansion of regional supermarket chains and implications for local suppliers: A comparison of findings from South Africa, Botswana, Zambia, and Zimbabwe

Since the early 2000s, there has been rapid growth in the number and spread of supermarkets in southern Africa. This paper is a synthesis of key findings of studies undertaken in Botswana, South Africa, Zambia, and Zimbabwe on the expansion of supermarkets and the impact this has had on suppliers and the competitive landscape in the region. Supermarkets are driving trade patterns in processed foods and household consumables within the region, opening up large markets for suppliers. If supermarkets are to become a key route to regional markets for suppliers, national policies and laws that currently exist need to be harmonized across the region with a wider view of developing regional value chains. Among key findings of the studies, supermarket procurement and sourcing strategies as well as buyer power are seen to affect the participation of suppliers in supermarket value chains, and affect the development of their capabilities. The impact on the competitive landscape of the spread of supermarkets in each country is also assessed, highlighting concerns of strategic behaviour that dominant supermarkets can engage in to exclude rivals

The expansion of regional supermarket chains / canging models of retailing and the implications for local supplier capabilities in South Africa, Botswana, Zambia, and Zimbabwe

Over the past two decades, southern African countries have experienced rapid growth in the number and spread of supermarkets. Several factors have been attributed to this growth, including increasing urbanization, increased per capita income, the rise of the middle class, economies of scale and scope, and transport economies. The format and location of supermarkets have also evolved over the years, moving away from serving the traditional high-end affluent consumers in urban areas to successfully penetrating new markets in low-income rural communities, including through more efficient procurement and distribution systems. This spread into rural areas and the rapid proliferation of supermarkets generally has given rise to some important consequences for competitive rivalry between grocery retail outlets, as well as for local suppliers who want to participate in supermarket value chains in the southern African region

The implications for suppliers of the spread of supermarkets in southern Africa

Abstract: The growth of supermarkets in southern Africa opens local and regional markets to suppliers through participation in supermarket supply chains. Supermarkets in the region provide an important route to market for processed foods and household consumable products. Through a regional value chain lens, this article provides an assessment of the implications of the growth of supermarkets for the participation of suppliers in Botswana, South Africa, Zambia and Zimbabwe. The research finds that, while supermarkets provide important opportunities for suppliers, they also exert considerable buyer power that limits supplier development and upgrading. High private standards, onerous requirements and costly trading terms negatively affect supplier participation in value chains. Long-term investments are required to build the capabilities of suppliers to meet supermarket requirements in terms of quality, consistency, volume and cost-competitiveness

Is it safe to use intravenous iron sucrose during pregnancy? A randomized controlled trial

Background: To compare the efficacy and safety of intravenous iron sucrose to oral iron in the treatment of iron deficiency anemia in pregnancy.Methods: In this randomized trial 200 pregnant women with hemoglobin between 7g/dl and 9g/dl and serum ferritin <15 ng/ml received either iron sucrose or oral iron sulphate. The iron sucrose dose was calculated from the following formula: weight (kg) x (110 g/l – actual hemoglobin (g/l) x 0.24 + 500mg. Treatment efficacy was assessed by clinical and laboratory response on 2nd week, 4th week of therapy, after that 4th weekly till delivery.Statistical analysis was done with paired and independent samples “t” test applied. Hemoglobin measurements were analyzed by repeated- measures of analysis of variance with Huynh and Feldt corrections. Serum ferritin measurement across the time within each group was analyzed by two sample test with equal variance .Adverse drug reactions, fetal weight, blood transfusions were also recorded.Results: The significant rise in hemoglobin from 8.0 ± 0.79gm/dl to10.80± 0.61gm/dl in intravenous group as compared to oral iron group from 8.19 ± 0.60gm/dl to 9.86± 0.61 gm/dl was seen at 4th week of treatment (P = 0.000).After 2 week of treatment rise in serum ferritin values were higher in intravenous group from 6.25± 1.05 ng/ml; to 155.33± 57.4 ng/ml and in oral group from5.71± 1.71ng/ml to20.8 ±9.5 ng/ml ( p=.000 ).No serious adverse drug reactions were observed in intravenousgroup. Conclusion: Iron sucrose is safe to use during pregnancy. It raises hemoglobin and restores iron stores faster than oral iron

The inter-relationships between regulation and competition enforcement in the South African liquid fuels industry

The competition authorities have devoted considerable time and energy to investigating anticompetitive conduct in the broad area of liquid fuel, gas and related products, where regulation sets rules for firm conduct. Competition cases have included the Sasol-Engen merger, collusive arrangements in gas distribution and the pricing of bitumen for road construction projects, and alleged coordination through information exchange in diesel. Drawing on a review of these matters we assess the inter-relationships between regulation and competition enforcement. We argue that regulation can be designed to enable greater competitive rivalry, while anti-competitive conduct can also be better remedied through recognition of the role of regulation

Reducing unsafe menstrual regulation through medication in Bangladesh

The Population Council and Marie Stopes Bangladesh, in collaboration with the Directorate General of Family Planning and with funding from the World Health Organization, tested the feasibility of introducing menstrual regulation with medication (MRM) in Bangladesh and assessed the acceptability of providing MRM using the combination drug regimen mifepristone and misoprostol in urban and rural public health facilities. As reported in this policy brief, the study demonstrates that it is feasible and safe to introduce MRM in rural and urban public health facilities. Given the choice, almost two-thirds of women preferred MRM to manual vacuum aspiration and women receiving MRM reported being satisfied or very satisfied with their quality of care. The report recommends that the Ministry of Health and Family Welfare and its partners work together to train providers and to procure the medical commodities to introduce MRM as an option for menstrual regulation in health facilities nationwide

Comparative studies on haemato-biochemical changes following pre-emptive analgesia with tramadol, pentazocine lactate and meloxicam inpain management of canine ovariohysterectomy

The present study was conducted to evaluate the effects of tramadol, pentazocine lactate and meloxicam as pre- emptive analgesics in dogs premedicated with glycopyrrolate, inducted with propofol and maintained with propofol continuous rate infusion (CRI) for certain haematological and biochemical parameters. The animals were randomly divided into three equal groups,viz. Group-T, Group-P and Group-M comprising six animals in each group and all the animals were premedicated with glycopyrrolate. After 10 min of pre-anaesthetic administration, pre-emptive analgesia was given. Blood was collected from cephalic or saphenous vein at intervals 0 (baseline) min before premedication, thereafter at 10 min, 30 min, 1 h, 2 h and 3 h after pre-emptive analgesic administration and haemato- biochemical parameters were recorded. Hb, PCV and TEC were significantly decreased at 30 min and 1 h interval in all the three groups. TLC and glucose concentration were significantly higher in group-M as compared to group-T and group-P at different time intervals. GGT level increased significantly at 30 min in all the three groups. CRP concentration was significantly higher in group-M as compared to group-T. Total protein was significantly decreased at 1 h interval in group-T and group-P, but in group-M such finding was noticed at 2 h interval. Cortisol was significantly lower in group-T in entire study period. The alterations in physiological and haematological parameters caused by tramadol, pentazocine lactate and meloxicam were found to be minimal and within the physiological limits. Tramadol produced less significant rise in CRP and cortisol concentrations which indicated better pain management. Based on the findings of the present study, it is concluded that tramadol is more effective as compared to pentazocine lactate and meloxicam in the management of post-operative pain due to canine ovariohysterectomy