Expansion of Regional Supermarkets in Zambia: Finding Common Ground with Local Suppliers
Supermarkets, which have become a key feature of Zambia’s retail sector, provide formal-market value chains that can trigger local development and even hold the potential of agro-processing for export. This chapter investigates how Zambian suppliers integrate into supermarket value chains. As a first step, the potential related to these value chains is discussed. Based on structured interviews with three major foreign supermarkets and 99 local firms, the authors then show that (potential) local suppliers overestimate their participatory preparedness. They rate their own capacities much more favourably than supermarkets do, and also somewhat misunderstand the latter’s procurement criteria. Other key challenges are the delayed payments by supermarkets, the low output of many local firms and the lack of financing to upgrade production processes. Supermarkets promoting their own brands causes additional competition for local suppliers. Based on this assessment, the authors provide policy recommendations to help Zambia benefit from clear opportunities in the retail sector.
The authors are grateful to Mike Morris and Sören Scholvin for comments on a draft version of this chapter. The chapter presents research carried out for the UNU-WIDER project on ‘Regional Growth and Development in Southern Africa’.
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