Why Supermarket Power Matters

by Shane Hamilton, The York Management School, University of York

A few years ago, I was reading Trucking Country and was impressed at the author’s grasp of food distribution in America. I did some research on the qualifications of the author and was surprised to learn that Shane Hamilton was located just across campus at  the University of Georgia in the History Department. We met for coffee and have maintained a periodic digital correspondence since then. I was also impressed when he showed up as an authority in the movie Food Chains. In the essay below he asks some provocative questions we need to think about as we view the role of the supermarket in the food system.  

What is the difference between Fairtrade and ‘fairly traded?’ The U.K.’s two largest supermarkets, Tesco and Sainsbury’s, recently announced they were abandoning some components of the Fairtrade certification scheme. Instead they will pursue in-house approximations of the longstanding third-party system that works to improve the incomes of farmers in developing countries who produce foods ranging from bananas to sugar. The outcome of Tesco and Sainsbury’s retreat from the Fairtrade scheme remains uncertain, but their turn to private standards illustrates a theme that has been consistent in the history of supermarkets ever since the first “price-wreckers” were constructed in disused warehouses in the U.S. in the early 1930s: retailers can exercise extraordinary power in the food economy through the use of private standards and centralized purchasing systems. Consumers may or may not be aware of the farreaching consequences of the decisions made by supermarket buying agents, but the farmers and food processors who anchor the supermarket supply chain certainly are.

 

Publix

In my book, Supermarket USA: Food and Power in the Cold War Farms Race (forthcoming from Yale University Press in 2018), I explore the history of how American supermarkets developed and deployed their power over agricultural landscapes. When supermarkets first arrived on the food retailing scene in the 1930s, their success depended on significant government investments in the infrastructure of industrial agriculture. Through the 1940s and 1950s, as supermarkets increasingly replaced “mom and pop” grocers as the primary food source for American families, big chain retailers including the Great Atlantic & Pacific, Safeway, and Kroger honed techniques for making sure farmers and food processors delivered exactly what supermarket buyers wanted on the shelves. For example, private specifications and centralized purchasing systems enabled big supermarkets to fundamentally transform the ways chickens were bred, reared, slaughtered, and sent to market by the early 1950s, with dramatic impacts on the lives and livelihoods of thousands of rural people in the Piedmont South and the Delmarva Peninsula. Even as supermarkets exercised such power over the nature of work and the nature of agricultural production in rural regions, proponents consistently upheld the American supermarket as a concrete embodiment of “consumer sovereignty,” a potent “weapon” in the Cold War contest to demonstrate the superiority of the capitalist food system to socialist citizens around the world.

The Cold War is long over, but the power of supermarkets to shape rural livelihoods is as strong as ever. And although the notion of consumer sovereignty no longer has the sharp anticommunist political edge it had during the Cold War, its basic assumptions still permeate our food culture. Best-selling food writer Michael Pollan has helped promote a foodie political worldview in which individual consumers are tasked with learning “everything you need to know to eat healthily, dine happily and live well.” It may well be the case that if all consumers knew as much as Michael Pollan about where their food comes from, they might indeed make choices that would help the environment, improve working conditions on farms, and promote public health. But asking individual consumers to make such informed decisions places a heavy burden on people who may not have the time or money to navigate through the mind-boggling maze of choices confronting us in today’s supermarket aisles.

 

Whole Foods

This is where standards and certification schemes come in. Whole Foods makes the point explicit on its website: “Wouldn’t it be more fun to shop for groceries if you didn’t have to worry about what food additives to avoid?” The company proudly proclaims that its use of private standards makes it easier for customers to trust that their purchases are healthy, environmentally sound, and support the livelihoods of farmers who work hard to improve soil health and animal welfare. Many other supermarkets and food processors tout their own sustainability standards; in fact, there are now so many such standards on the scene that industry insiders often speak of “standard fatigue.” Organizations such as the Sustainable Agriculture Initiative Platform have begun work on simplifying the ways in which sustainability standards are used to encourage resilient, safe, and healthy agricultural production. Retailer standards are clearly an important and powerful means by which individual consumers can be presented with choices that are better for their health, better for workers and farmers, and better for the environment.

Yet our current reliance on private standards carries the troubling implication that only for-profit enterprises—not government regulators or third-party nonprofit organizations—are best able to decide which choices are best for us and the supply chains upon which we rely for our food. When supermarkets use sustainability standards and certification schemes to gain consumer trust and competitive advantage, the results can be dramatically beneficial to the health and resilience of the entire agricultural supply chain. Yet competitive forces, such as those besetting the U.K.’s largest supermarkets right now as they continue to lose market share to upstart discounters Aldi and Lidl, can also push retailers to roll back their commitments to sustainable sourcing. The fact that supermarkets have such power suggests we need something more robust than highly informed “sovereign consumers” watching over the food supply chain. Can we really expect consumers to know whether a product that claims to be “fairly traded” actually is?

Aldi

Next week: Food chains

Shane Hamilton is a lecturer in International Business Strategy and head of the International Business, Strategy, and Management group at The York Management School, University of York. His first book, Trucking Country: The Road to America’s Wal-Mart Economy (Princeton, 2008) won the 2009 Theodore Saloutos Award for Best Book in Agricultural History. With Sarah Phillips, he is the co-author of The Kitchen Debate and Cold War Consumer Politics: A Brief History with Documents (Bedford, 2014). His forthcoming book, to be published by Yale University Press in 2018, explores the role of supermarkets in the Cold War “Farms Race.” He is also associate editor of Enterprise & Society and has published articles on food and agribusiness in Technology & CultureBusiness History ReviewEnterprise & Society, and Agricultural History.

                              

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