International supermarket news 1 July 08

Farmers in India and other developing countries stand to gain up to 50 per cent more when they sell their produce to supermarkets, where consumers also get the products at a much cheaper price compared to traditional retail shops, a new study says.

"When farmers enter supermarket channels, they tend to earn from 20 to 50 per cent more in net terms," an International Food Policy Research Institute (IFPRI) study found.

The study, conducted by IFPRI's Asia Director Ashok Gulati and a Michigan State University professor Thomas Reardon, added that food price savings from supermarkets first accrue to the middle class, but as supermarkets spread into the food markets of the urban poor and into rural towns, the benefits are extended to poor consumers also.

"For example, in Delhi, India, the basic foods of the urban poor are cheaper in supermarkets than in traditional retail shops," the study said, adding rice and wheat are 15 per cent cheaper and vegetables 33 per cent less costly there.

See also "The Rise of Supermarkets and Their Development Implications: International Experience Relevant for India" by Thomas Reardon and Ashok Gulati. IFPRI Discussion Paper No. 752 [1], February 2008