A New Breed of Tomato Farmers? The Effect of Transnational Supermarket Standards on Domestic Cultures of Production and Trade

Abstract

Transnational supermarkets are entering and establishing themselves in distinct national contexts, yet their success depends on the effective localization of their operations in each new place. The establishment of local supply chains, vertically coordinated through the implementation of private standards, is a key localization strategy. Supermarket procurement practices introduce a wide array of standards that influence not just product quality, but how the product is produced and by whom as well as how it is procured and traded.

This research compares domestic suppliers of a fresh vegetable (tomato) across two types of retailers (wet markets and supermarkets) in a lower-income developing country (Nicaragua), to better understand the effects of supermarket procurement practices in developing countries. While economic geographers and others propose that in order to be successful in new countries supermarkets must adapt to local cultures of production and consumption, I found that a major transnational supermarket chain, instead of adapting to local cultures of production and trade, sidestepped them completely. Through the introduction of a broad range of novel procurement standards this supermarket chain induced changes not just in product attributes and production practices, but also in the organization of production in time and space and in how products are exchanged, including units of sale, payment methods, and coordination mechanisms. In order to better understand the effects of the transnational supermarket growth in developing countries, we need to expand the lens beyond product grades and standards to procurement practices and standards more generally