The Growth of Supermarkets and its Implications for Smallholders in Uganda

AUTHOR

Gabriel Elepu

CITATION

Gabriel Elepu (2009). Case Study #6-11, "The Growth of Supermarkets and its Implications for Smallholders in Uganda". In: Per Pinstrup-Andersen and Fuzhi Cheng (editors), "Food Policy for Developing Countries: Case Studies." 9 pp.
URL: http://cip.cornell.edu/dns.gfs/1256051512

EXECUTIVE SUMMARY

The growth of supermarkets is a phenomenon that characterizes many developing countries. The growth of supermarkets in Uganda can be attributed to the country's favorable investment climate coupled with the increase in supermarket demand factors such as the rise in urbanization, the growth of the middle class, and the increase in the number of employed women. As in other developing countries, supermarkets in Uganda are patronized mostly by younger and better-educated consumers with smaller families.

Changes in food preferences and eating habits among urban consumers can partially explain the increasing patronage of supermarkets in Uganda. Moreover, supermarket customers regard these stores as offering higher food quality, safety, variety, and customer service than open or roadside markets. Most supermarket shoppers, however, also continue to patronize traditional food retail outlets, such as open markets, which still dominate agri-food retailing in Uganda.

At this initial stage of supermarket growth, early participation by local farmers in the new agri-food marketing system could promote commercialization of agriculture in Uganda. There has been a public outcry, however, that supermarkets are marginalizing local farmers by importing food products that could be procured locally. In response to this supermarket procurement behavior, Ugandan policy makers have twice proposed the formulation of supermarket trade policies to regulate the importation of specific food products.

Although it is true that Ugandan supermarkets import most of their food products, some foods are locally sourced depending on their availability, quality, and safety. A few Ugandan smallholder farmers supply supermarkets with fruits, vegetables, and staple foodstuffs. These farmers have found supermarkets to be more reliable and preferred markets than traditional food buyers. Yet these farmers face a number of constraints in supplying supermarkets because of the latter's stringent supply terms.

Your assignment is to advise the government of Uganda on appropriate policies to help ensure that local smallholder farmers benefit from supermarket development in Uganda.

Download PDF (229 KB)