The Effects of Modern Food Retail Development on Consumers, Producers, Wholesalers and Traditional Retailers: The Case of West Java

In developing countries, retail development was never considered as a strategy to boost the economy until the Asian financial crisis happened in 1998, which made the countries could not rely on their exports anymore. Indonesia experienced a difficult economic period and it became worse due to the political crisis, which happened in the same time with the financial crisis. One of the economic recovery programs was retail liberalisation, which consequently opened the domestic market for foreign retailers. Meanwhile, rapid urbanisation and huge investments in real estate have made retail sector, particularly modern food retail in Indonesia to grow bigger, it challenged local retailers to develop. The development of super- and hypermarkets in Indonesia in the last decade indicated that retail sector development was used as a strategy to encourage the economy. However, the development brings controversies regarding its impact on traditional retailers, environment and local economy. This study has an objective to investigate whether the development of super- and hypermarkets as part of a strategy to boost the local economy benefits actors in the value chain, i.e. agricultural producers, local food processors and wholesalers. West Java was chosen as the case in this study considering that this province, is the centre of horticulture production, which experienced rapid development of modern food retail in the last decade. ......

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