The Rapid Rise of Supermarkets in Central and Eastern Europe: Implications for the Agrifood Sector and Rural Development

by Liesbeth Dries, Thomas Reardon and Johan F. M. Swinnen

Development Policy Review  Volume 22 Issue 5 Page 525 - September 2004

During the 1990s transition period in Central and Eastern Europe, the retail sector was privatised and some domestic-capital supermarket chains gradually emerged. Massive inflows of foreign direct investment followed and competitive domestic investments drove a rapid take-off of large-format modern retail sector development from a tiny 'luxury' niche of around 5% of food retail in the mid-1990s to 40-50% by 2003 in 'firstwave' and 20-40% in 'second-wave' countries. In 'third-wave' countries like Russia, it is still only 10% but growing very fast. In most countries there is rapid multi-nationalisation and consolidation of the supermarket sector, with profound changes in procurement systems affecting the conditions facing farmers, and creating important opportunities and challenges.

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