Buyer Power and Competition in European Food Retailing

Citation

Burt, S. (2003), "Buyer Power and Competition in European Food Retailing", International Journal of Retail & Distribution Management, Vol. 31 No. 9, pp. 477-477. https://doi.org/10.1108/09590550310491450

This book is based on a European Commission‐sponsored research project and at times the origin is evident. That said, the material is presented in a logical manner structured around three inter‐linked parts. The text moves from a review of the underpinning theory and definitions of market power and other relevant concepts, through a macro level attempt to map the European retail food sector and its structure, to a series of country‐ and product market‐specific case studies. Each of these individual sections has merit in its own right, as well as contributing to the overall text.

Part 1 provides a review of the economic models of market power and sets the context for the study. The authors start by providing a useful review of the standard economic text‐book treatments of buyer power – a perspective which is novel to many retail academics working in this area, who tend to use a more “holistic” and behavioural approach based upon marketing literature. The need to adapt these models, usually developed from a manufacturing or production context, to the specific features of retailing is clearly recognised. The complexity introduced by the retail context is particularly evident in the chapter dealing with definitions and measures of market power, which acknowledges the need to cope with diverse organisational structures, store types and product ranges. A further important outcome of Part 1 is the introduction and justification of the framework used throughout the case studies.

Anyone working in the field of comparative retailing will be aware of the mine‐field of retail statistics. In Part 2, the authors attempt to negotiate these problems by first presenting a view of market structures based upon existing secondary sources, and then by constructing their own measures. Whilst few would argue with the overall trends and general directions identified as part of this exercise, the problems of data comparability are evident. The authors’ own attempt to create an “EU Retail Food Market Share Matrix” represents a brave attempt, but to some extent falls foul of the problems found with existing sources. Although it is easy to be distracted by the detail and legitimacy of the various tables presented, the authors should at least be congratulated on collating a wide range of sources and presenting the material with a valid commentary.

The final part of the book presents a series of case studies covering the overall food retail market structure and three specific product markets (washing powder and detergents, coffee, and butter and margarine) in France, Germany, Spain and the UK. On the whole, these represent good, competent review chapters – particularly when nationally sourced data are used – and provide some interesting insights into the use of specific negotiation mechanisms. The book then concludes by referring back to the framework introduced earlier, and an attempt is made to draw general conclusions from the study.

This book presents a timely and interesting overview of retail power in the European food market. By approaching the subject primarily from an economist’s perspective, the material adds value to that already available from marketing and management academics. It also illustrates, quite clearly, the problems of comparability of data, and the definitions and measurements of retail power, which make retailing such a complex (and interesting) sector to study.