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The food distribution system of the future: Convergence towards the US or UK model?

Author

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  • Ronald W. Cotterill

    (W. B. Young 318, Department of Agribusiness Economics, University of Connecticut 1376 Storrs Road, U-21, Storrs, CT 06269-4021)

Abstract

This article presents and analyzes a hypothesis that is of fundamental importance for the organization and performance of food systems. That hypothesis is that food manufacturing and distribution systems are converging to a common organizational structure. Two polar opposite organizational structures are the US manufacturer-led model and the UK retailer-led model. The article explains reasons for convergence, compares the US and UK models, and argues for expository purposes only that developed nation food systems well converge to the US manufacturer-led model. The paper discusses key parameters that identify how convergence will occur. The author, however, is not convinced that the US model should win. The UK retailer-led model with its extensive private label program probably offers superior benefits to consumers. © 1997 John Wiley & Sons, Inc.

Suggested Citation

  • Ronald W. Cotterill, 1997. "The food distribution system of the future: Convergence towards the US or UK model?," Agribusiness, John Wiley & Sons, Ltd., vol. 13(2), pages 123-135.
    • Handle: RePEc:wly:agribz:v:13:y:1997:i:2:p:123-135
    DOI: 10.1002/(SICI)1520-6297(199703/04)13:2<123::AID-AGR3>3.0.CO;2-4
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    References listed on IDEAS

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    1. Alex Hughes, 1997. "The changing organization of new product development for retailers' private labels: A UK-US comparison," Agribusiness, John Wiley & Sons, Ltd., vol. 13(2), pages 169-184.
    2. Franklin, Andrew W. & Cotterill, Ronald W., 1993. "An Analysis of Local Market Concentration Levels and Trends in the U.S. Grocery Retailing Industry," Research Reports 25173, University of Connecticut, Food Marketing Policy Center.
    3. Chevalier, Judith A, 1995. "Capital Structure and Product-Market Competition: Empirical Evidence from the Supermarket Industry," American Economic Review, American Economic Association, vol. 85(3), pages 415-435, June.
    4. Jagmohan S. Raju & Raj Sethuraman & Sanjay K. Dhar, 1995. "The Introduction and Performance of Store Brands," Management Science, INFORMS, vol. 41(6), pages 957-978, June.
    5. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59(3), pages 185-185.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Inderst, Roman & Wey, Christian, 2007. "Buyer power and supplier incentives," European Economic Review, Elsevier, vol. 51(3), pages 647-667, April.
    2. Neil Wrigley, 1997. "Exporting the British model of food retailing to the US: Implications for the EU-US food systems convergence debate," Agribusiness, John Wiley & Sons, Ltd., vol. 13(2), pages 137-152.
    3. Chimhundu, Ranga & McNeill, Lisa S. & Hamlin, Robert P., 2015. "Manufacturer and retailer brands: Is strategic coexistence the norm?," Australasian marketing journal, Elsevier, vol. 23(1), pages 49-60.
    4. Michelle Lowe & Neil Wrigley, 2010. "The “Continuously Morphing” Retail TNC During Market Entry: Interpreting Tesco's Expansion into the United States," Economic Geography, Clark University, vol. 86(4), pages 381-408, October.
    5. Ian Clarke & Malcolm Kirkup & Harmen Oppewal, 2012. "Consumer Satisfaction with Local Retail Diversity in the UK: Effects of Supermarket Access, Brand Variety, and Social Deprivation," Environment and Planning A, , vol. 44(8), pages 1896-1911, August.
    6. Regmi, Anita & Takeshima, Hiroyuki & Unnevehr, Laurian J., 2008. "Convergence in Global Food Demand and Delivery," Economic Research Report 56449, United States Department of Agriculture, Economic Research Service.
    7. Bergès-Sennou Fabian & Bontems Philippe & Réquillart Vincent, 2004. "Economics of Private Labels: A Survey of Literature," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-25, February.
    8. Cesar Revoredo‐Giha & Alan Renwick, 2012. "Retailers Price Behavior in the UK Fresh Fruit and Vegetable Market," Agribusiness, John Wiley & Sons, Ltd., vol. 28(4), pages 451-468, September.
    9. Maksymilian Czeczotko & Hanna Górska-Warsewicz & Wacław Laskowski, 2020. "Towards Sustainable Private Labels—What is the Consumer Behavior Relating to Private Labels in the UK and Poland?," Sustainability, MDPI, vol. 12(15), pages 1-18, July.
    10. N Wrigley, 1997. "Foreign Retail Capital on the Battlefields of Connecticut: Competition Regulation at the Local Scale and its Implications," Environment and Planning A, , vol. 29(7), pages 1141-1152, July.
    11. Vickner, Steven S. & Davies, Stephen P. & Fulton, Joan R. & Vantreese, Valerie L., 2000. "Estimating Market Power And Pricing Conduct For Private-Label And National Brands In A Product-Differentiated Oligopoly: The Case Of A Frozen Vegetable Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 31(2), pages 1-13, July.
    12. Unknown, 2005. "Antitrust Analysis of Supermarket Retailing: Common Global Concerns that Play Out in Local Markets," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137831, Australian Agricultural and Resource Economics Society.
    13. Regmi, Anita & Unnevehr, Laurian J., 2005. "Convergence or Divergence in Food Demand: Comparison of Trends in the EU and North America," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24687, European Association of Agricultural Economists.
    14. Hökelekli, Gizem & Lamey, Lien & Verboven, Frank, 2017. "Private label line proliferation and private label tier pricing: A new dimension of competition between private labels and national brands," Journal of Retailing and Consumer Services, Elsevier, vol. 36(C), pages 39-52.
    15. Venturini, Luciano, 1998. "Countervailing Power And Antitrust Policy In The Food System," Conference Papers 14489, University of Minnesota, Center for International Food and Agricultural Policy.
    16. Holleran, Erin & Bredahl, Maury E. & Zaibet, Lokman, 1999. "Private incentives for adopting food safety and quality assurance," Food Policy, Elsevier, vol. 24(6), pages 669-683, December.
    17. Digal, Larry N. & Ahmadi-Esfahani, Fredoun Z., 2002. "Market power analysis in the retail food industry: a survey of methods," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), pages 1-26.
    18. David T. Merrett, 2020. "The Making of Australia's Supermarket Duopoly, 1958–2000," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 60(3), pages 301-321, November.
    19. Regmi, Anita & Unnevehr, Laurian J., 2006. "Are Diets Converging Globally? A Comparison of Trends Across Selected Countries," Journal of Food Distribution Research, Food Distribution Research Society, vol. 37(1), pages 1-8, March.

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