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Traditional food traders in developing countries and competition from supermarkets: Evidence from Indonesia

Author

Listed:
  • Suryadarma, Daniel
  • Poesoro, Adri
  • Akhmadi
  • Budiyati, Sri
  • Rosfadhila, Meuthia
  • Suryahadi, Asep

Abstract

Indonesia's urban centers recently underwent an explosion of supermarkets. With cheaper, higher quality commodities and better services, supermarkets have the potential to drive traders in traditional markets out of business. In this paper, we evaluate whether this is indeed the case. We find that traditional traders experienced declines in their business. However, both qualitative and quantitative findings indicate that the main cause of decline is not supermarkets. Instead, traditional markets are plagued with internal problems and face increasingly bitter competition from street vendors. Therefore, the policy recommendations include strengthening traditional traders and seriously tackling the problem of street vendors.

Suggested Citation

  • Suryadarma, Daniel & Poesoro, Adri & Akhmadi & Budiyati, Sri & Rosfadhila, Meuthia & Suryahadi, Asep, 2010. "Traditional food traders in developing countries and competition from supermarkets: Evidence from Indonesia," Food Policy, Elsevier, vol. 35(1), pages 79-86, February.
  • Handle: RePEc:eee:jfpoli:v:35:y:2010:i:1:p:79-86
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    References listed on IDEAS

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    1. Elizabeth M.M.Q. Farina & Rubens Nunes & Guilherme F. de A Monteiro, 2005. "Supermarkets and their impacts on the agrifood system of Brazil: The competition among retailers," Agribusiness, John Wiley & Sons, Ltd., vol. 21(2), pages 133-147.
    2. Emek Basker, 2002. "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion," Working Papers 0215, Department of Economics, University of Missouri, revised Jan 2004.
    3. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
    4. Bart Minten, 2008. "The Food Retail Revolution in Poor Countries: Is It Coming or Is It Over?," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 767-789.
    5. Jerry Hausman & Ephraim Leibtag, 2006. "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart," CeMMAP working papers CWP06/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    6. W. Bruce Traill, 2006. "The Rapid Rise of Supermarkets?," Development Policy Review, Overseas Development Institute, vol. 24(2), pages 163-174, March.
    7. D'Haese, Marijke & Van Huylenbroeck, Guido, 2005. "The rise of supermarkets and changing expenditure patterns of poor rural households case study in the Transkei area, South Africa," Food Policy, Elsevier, pages 97-113.
    8. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, pages 174-183.
    9. Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., pages 1157-1177.
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    11. Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., pages 1157-1177.
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    Cited by:

    1. Baker, Derek & Mtimet, Nadhem, 2013. "It depends who you ask: How to establish a sampling frame for traders?," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 159701, African Association of Agricultural Economists (AAAE).
    2. Alim Setiawan Slamet & Akira Nakayasu & Masahiro Ichikawa, 2017. "Small-Scale Vegetable Farmers’ Participation in Modern Retail Market Channels in Indonesia: The Determinants of and Effects on Their Income," Agriculture, MDPI, Open Access Journal, vol. 7(2), pages 1-16, February.
    3. Moustier, P., 2012. "Organisation et performance des filières alimentaires dans les pays du Sud : le rôle de la proximité. Synthèse des travaux pour l’habilitation à diriger des recherches," Research serial MOISA, UMR MOISA : Marchés, Organisations, Institutions et Stratégies d'Acteurs : CIHEAM-IAMM, CIRAD, INRA, Montpellier SupAgro - Montpellier, France, number 201207.

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