Retail

Fruit for Sale at Retail

Fruit for sale at retil outlet

Despite their vitally important role in delivering food to consumers few studies have examined the impact of climate change on the retail sector or the implications for risk management practices employed by this important sub-sector of the food security value chain. Food supply chains are exposed to cascading effects where an event can have an unforeseen chain of knock-on impacts up and down ther whole chain and even across chains.  It is retailers who are exposed most to cascade effects and essentially the supply chain leaders in delivering food and food security to consumers, especially in developed economies like Australia. And in emerging markets it’s retailing that’s growing more strongly than any sector. It is also the most highly ownership concentrated section of the food supply chain and for this reason it often attracts a share of negative attention.

The reality is that the food and wholesale facilities and the infrastructure around them are among the most important, if not the most important, foods assets of a country. When they are weak or absent then access to food can be severely compromosed. Economies of scale are extremely strong and for this reason the retail and wholesale markest are highly concentrated in every country. Economies of scale enable low costs and lower prices to consumers and these are key attributes for food security.  Competition policy takes on importance to ensure concentrated markets of this type behave in a way that’s conducive to food security. At the same time, however, it’s important not to go overboard with penalties on a sector that’s a vital interface with consumers and which needs to be strong and resilient to climate change events.