Define retail concentration

Answer 1

By "Retail concentration" we mean the share of affairs belonging to generally the top 4 or 5 firms present in a regional market of the Great distribution as a percentage on the total.

Is Retail concentration simply a concentration ratio as emerging in the food sector? Not properly. This is due to a) the particular relevance retail is gaining on a global scale; b) the particular shape food chain has.

In last years Retail Concetration moved ahead with fusions and acquisitions along the entire food chain. We can assume with Grievink (2003) that in few years there will be only 5 dominant actors in the globalised food chain. This way, the food chain become more and more vertically integrated, with global corporations able to coordinate inputs from the the seed to the field, from the stable to the table. Retail concentration by one hand is the answer that retail is giving to compete with the giants of agrofood industry. By the other hand, is the agrofood industry in itself searching to arrive directly to the consumers, through a refined relations system.

Recently the European Commission (10 December 2008) proposed solutions to face with overall price increase about foodstuff. Among the measures proposed, several relate to the retail.

In particular, the payments delay to the producers; the additional fees asked to the producers to place on the shelves branded products; price transparency; better regulation on promotional activities and openings/closing time are all issues on the agenda.

For supporters, retail concentraion means more chances for consumers, lower prices, better quality. For opponenst, by the contrary, the diseappearing of traditional shops, of food culture, of neighborohod life in general. Furthermore, too much concentration mean squeezing the price of industry and of agriculture, which can lead to outsourcing food from anywhere it can costs less, without a truly long term impact assessment.

(Corrado Finardi, policy advisor, Italy)