The Rapid Rise of Supermarkets in Kenya: Impact on the Fresh Fruits and Vegetables Supply System

Report By David Neven, Thomas Reardon, Jonathan Chege, Michael M. Odera, Dave Weatherspoon and Florence Ondieki-Mwaura

A Joint Publication of Partnerships for Food Industry Development - Fruits and Vegetables (PFID-F&V) Michigan State University And Muguga South Centre Kenya, Agricultural Research Institute (KARI), April 2005.

See also Development Policy Review Volume 22 Issue 6 Page 669 - November 2004

The research presented in this report focuses on the impact of the rise of domestic supermarkets on urban consumers of and supply chains for fresh fruits and vegetables (FFV) in Kenya. Kenya provides an interesting case study because it demonstrates how even in a low income country in Sub-Sahara Africa supermarkets are growing with all the irrepressibility of an idea whose time has come.

In Kenya, we show how supermarkets have grown from a tiny niche at the start of the 1990s to 20% of the urban food retail sector in 2003. Furthermore, supermarket development in Kenya is currently in an early, formative stage where changes are taking place fast. This study thus allows us to capture these fleeting moments and provide a benchmark for future studies on urban food retailing in Kenya.

We focused on FFV because it is an important sub-sector in the country, both from the consumer perspective (important part of the diet, the food expenditure) and the  armer perspective (great income potential for nearly 2 million small scale producers in Kenya).

Within this context, this study aims to help answer the following three strategic  estions, each at a different level of the supply chain: (1) at the retailer level: ‘What is the importance of supermarkets in food and FFV retailing and what is the nature of the supermarkets' FFV procurement system?'; (2) at the consumer level: ‘What is the effect of the development of the supermarket sector on the (urban)  consumers' food and FFV purchasing behavior?'; and (3) at the farmer level: ‘What is the effect of the development of the supermarket sector on (FFV) producers' behavior and net income?'.

The data for this study were collected over 13 months of field research in Kenya  January-November 2003, April 2004, and August 2004). Given the absence of secondary data on retail in general, and on supermarkets in particular, in Kenya, the bulk of the research effort focused on primary data collection. A total of 1,174 respondents (retailers, farmers, consumers, key informants) were interviewed.

Full report available for free download at http://www.pfid.msu.edu/media/publications/techreports/kenya15.pdf