Edited by Katrijn Gielens and Els Gijsbrechts
Chapter 18: Retailer power in the grocery industry
Retailers have become the gatekeepers to shoppers, the end users of CPG products. A relative handful of retailers now controls access to enormous numbers of consumers. This situation is a far cry from the 1960s and 1970s, when big CPG manufacturers bossed around much smaller retailers. This chapter provides an overview of why retailers are in the driving seat. It distinguishes between two sources of retailer power: growing retailer scale, and growing retailer sophistication. Retailers have grown in scale through internationalization, a consolidating wave of mergers and acquisitions, and buying group membership. However, the playing field is tilted further in favor of large retailers than is indicated by their sheer size. Retailers have grown into sophisticated businesses, that are growing organically through multi-channel operations and that have become competitors to their suppliers by selling private labels.
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