by Daniel Suryadarma, Adri Poesoro, Sri Budiyati, Akhmadi and Meuthia Rosfadhila

SMERU Research Institute, August 2007

ABSTRACT

This study measures the impact of supermarkets on traditional markets in urban centers in Indonesia quantitatively using difference-in-difference and econometric methods as well as qualitatively using in-depth interviews. The quantitative methods find no statistically significant impact on earnings and profit but a statistically significant impact of supermarkets on the number of employees in traditional markets. The qualitative findings suggest that the decline in traditional markets is mostly caused by internal problems from which supermarkets benefit. Therefore, ensuring the sustainability of traditional markets would require an overhaul of the traditional market management system, enabling them to compete with and survive alongside supermarkets.

Indonesia's Supermarket Boom Offers New Opportunity for Traditional Markets & Farmers

Modern retailing and supermarkets are booming in Indonesia, growing at 20 percent a year since the lifting of restrictions in 1998. In fact, they now account for 30 percent of the food retail business. The national output of fresh fruits and vegetables has doubled to US$10 billion from 1994-2004 and is increasingly reflected in changing patterns of food consumption. Indonesians consumption of fresh produce was 50 per of their of expenditure on rice in 1994, it rose to increased to 75 percent in 2004 and, in urban areas, it now stands at 100 percent. i.e. urban Indonesians, are spending the same amount of money on rice as they are on fresh fruit and vegetables. Nearly all of this produce is home grown and while imports have nearly tripled over the last decade, they still account for only 3 percent domestic consumption.

These findings are part of a report Horticultural Producers and Supermarket Development in Indonesia released by the World Bank in Jakarta.

by  Achilles Costales et al. IFPRI Research Report No. 151, March 2007

A dramatic increase over the past fifteen years in domestic pork demand and production in the Philippines has created a potentially profitable opportunity for poor rural and agricultural households. In Southern and Central Luzon, the two biggest markets, however, smallholder pig producers hold only a minority share of total production compared to larger commercial farms. This report seeks to assess the scope for smallholders to remain in business by analyzing the relative profitability of small and large farms. Using field data from pig-producing households, the researchers assess the role of internal and external factors in determining a household's participation in production and marketing and examine the combination of technical and allocative efficiency exhibited by specific farms under particular circumstances. They conclude that the smallest-scale pig producers will not survive market competition and will require alternative occupations. Many others, however, could profit from pig production if policy and institutional changes ensure their access to inputs, to animal health services that can guarantee output quality, and to markets for higher quality output. These findings are a valuable contribution to poverty reduction efforts in the Philippines.

by Ronnie S. Natawidjaja, Trisna Insan Noor, Tomy Perdana, Elly Rasmikayati, Sjaiful Bachri, Thomas Reardon

The study focuses on: the rise of supermarkets, the changes in their procurement systems for FFV, and the impacts of that transformation horticulture supply chains at a macro level and the case of production zones in West Java.

FAO-VREDESEILANDEN Southeast Asia Sub-Regional Seminar on Enhancing Capacities of NGOs and Farmer Groups to Link Farmers to Market

9-12 May 2006, Bali, Indonesia

Rapid economic growth and urbanization are transforming the retail food sector in the developing economies of the Asia-Pacific region. At the center of this revolution is the spread of modern self-service foodstores: supermarkets, hypermarkets, discount and club stores, and chain convenience stores. Through highly efficient procurement and distribution systems, modern chain stores are able to offer consumers lower prices, greater convenience, and higher quality and safer food in increasingly complex, often congested, urban markets. They are also having profound effects on the food supply chain through their increased capacity to trade with large and distant suppliers and their ability to force domestic food producers to adapt and modernize.

Elsevier Food international Vol. 10, Number 1, February 2007. Article by  Pascal Kuipers

Since the economic crisis of 1997/98, the Thai economy has been recovering despite a global economic downturn in the first years of the current decade. Like in other emerging markets in Southeast Asia and worldwide, modern retail infrastructure in Thailand is developing to the detriment of traditional channels of food and grocery distribution. However, representatives of traditional structures call for government intervention, especially to curb foreign retailers' expansion.