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Analysis of grocery buying and selling practices among manufacturers and distributors: Implications for industry structure and performance

Author

Listed:
  • Jeffrey M. Thomas

    (National Livestock and Meat Board, Glen Allen, VA)

  • John M. Staatz

    (National Livestock and Meat Board, Glen Allen, VA)

  • Thomas R. Pierson

    (Department of Agricultural Economics, Michigan State University)

Abstract

Current buying and selling practices among grocery manufacturers and distributors reduce the efficiency of the food distribution system. This article applies the concept of positive feedback to explain the evolution of the system to its current situation. The study also uses concepts from game theory and transaction-cost economics to explain the persistence of inefficient practices in spite of the potential benefits from alternative forms of transacting. Based on these theoretical concepts, current grocery industry initiatives, such as every day low pricing and efficient consumer response, aimed at creating a lower cost food distribution system, are analyzed. © 1995 John Wiley & Sons, Inc.

Suggested Citation

  • Jeffrey M. Thomas & John M. Staatz & Thomas R. Pierson, 1995. "Analysis of grocery buying and selling practices among manufacturers and distributors: Implications for industry structure and performance," Agribusiness, John Wiley & Sons, Ltd., vol. 11(6), pages 537-551.
    • Handle: RePEc:wly:agribz:v:11:y:1995:i:6:p:537-551
    DOI: 10.1002/1520-6297(199511/12)11:6<537::AID-AGR2720110606>3.0.CO;2-H
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    References listed on IDEAS

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    1. Hamm, Larry G., 1981. "The Impact of Food Distributor Procurement Practices on food System Structure and Coordination," Working Papers 202964, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    2. Newton, Doris J., 1993. "Nontraditional Retailers Challenge the Supermarket Industry," Food Review/ National Food Review, United States Department of Agriculture, Economic Research Service, vol. 16(1), January.
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    Cited by:

    1. Mia, Lokman & Winata, Lanita, 2008. "Manufacturing strategy, broad scope MAS information and information and communication technology," The British Accounting Review, Elsevier, vol. 40(2), pages 182-192.
    2. Kinsey, Jean D. & Senauer, Benjamin & King, Robert P. & Phumpiu, Paul F., 1996. "Changes In Retail Food Delivery: Signals For Producers, Processors And Distributors," Working Papers 14352, University of Minnesota, The Food Industry Center.

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