Internationalisation of Food Retailing

Internationalisation of Food Retailing

INTERNATIONALISATION OF FOOD RETAILING

AND ITS IMPACT ON SUPPLY CHAIN OPERATIONS

Introduction

What is internationalisation, and in particular the internationalisation of the food retailing industry, and why has it become such a major development in relation to the supply chain, and how has it impacted the public consumer market. These are questions that will be explored and discussed over the next few pages.

Internationalisation has made many food retailers look beyond the confines of the domestic market, for their retail presence and the sourcing of produce. Food retailers tend to favour two types of strategies:

• The first is the one-format internationalisation retailers made famous by discount outlets such as Aldi and Lidals. These companies use the same style and format regardless of the country they are operating in, and use the same produce in all areas (minus some local variants). In terms of supply chain operations it’s a case of stretching the existing distribution channels and maintaining either regional or centralised distribution hubs, and/or stockless depots operating cross-docking arrangements.

• The other format is the international multiformat or multichannelisation delivered in hypermarket format by retailers such as Carrefour and to some extent Wal-Mart. This format presents the biggest challenges to the supply chain operations, with multiple freight modes, complicated distribution channels that lead to extended supply lead times with unreliable and inconsistent transit