The supermarket system: Balanced on a knife edge?


The supermarket system: Balanced on a knife edge?

Lisa Jack

Supermarkets are designed to pass ‘economies of scale’ on to consumers in the form of low prices and a wide choice of products. For consumers, they offer economy in time as well as money. From their origins in the USA in the 1920s, supermarkets have been low-margin, high-volume businesses. Owners worked out how to run a supermarket profitably and the equations behind these profits have not changed since the mid-twentieth century. The problem is that the economies of scale in a supermarket are achieved (at least in part) by re-locating costs to other players in food supply networks and by high levels of food waste throughout the system. In this Discussion Paper, Lisa Jack unpacks the numbers involved over a century of supermarket systems, and considers the alternatives. Is it possible to scale-down the system and still have cost-benefits? And who benefits?

About the author

Lisa Jack is Professor of Accounting in the Faculty of Business and Law at the University of Portsmouth, and is one of the few accounting researchers to investigate the agri-food industry.

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