FOOD RETAILING'S CONTRIBUTION TO SOCIETY IS LITTLE KNOWN

David Merrefield

A new study commissioned by CIES-The Food Business Forum raises and attempts to answer a provocative question: What is the contribution of food retailing to society and to the economy?

With that in mind, CIES commissioned Templeton College, University of Oxford, England, to conduct a study of the matter. In keeping with CIES itself, the study takes a global view. Paris-based CIES is a trade association that puts together upper-echelon executives at events, forming a sort of food business network. Some 200 retailer and 200 supplier companies in more than 50 countries are members.

The study was inspired by the observation that, according to the study, "the retail sector as a whole is in many instances viewed as having a damaging influence, whether in terms of employment conditions, competitive practices, product quality or environmental impact."

So the study endeavors to discover the contribution of food retailing on three key areas -- the economy, employment and society. Curiously, one of the chief findings of the study is that exact measurements of food retailing's contributions are nowhere to be found: "There is no single source of data on retailing, even less so on food retailing." So, in the main, the study relies on generalized retailing information. Nevertheless, let's take a look at the three aspects of the study, relying on the news article on Page 32, along with the study's executive summary.

Employment: In this regard, the study points out that, obviously, "food retailing is a major employment sector," but also notes that "the sector as a whole still grapples with widespread perceptions that it is an unattractive career choice." That perception can be attacked by promoting the fact that high-level careers can be pursued in the industry. (See Page 1, too.) Retailing is also a huge employer, with 17.4% of the working population in the United States engaged in it; 10% in the United Kingdom; and 7% in Germany.

Economy: Since there generally is no way to separate data on food retailing from that of other forms of retailing, broad conclusions were drawn. The lack of specific data is to be expected since in many countries, retailing enterprises operate a number of different retailing styles. There can be no doubt that retailing is the main engine of the economy or the greatest growth driver, depending on the country. In the United States, retailing accounts for $3.5 trillion in sales, or 9.2% of gross domestic product. In China, retailing equals growth, moving ahead at a rate of 29% as compared to 8.5% for the GDP.

Society: The study points out that "stores and shopping centers are places where consumers spend parts of their lives and are of regular significance in ways that manufacturing industries are not. Retailers can react rapidly to customer demand and lead change in the value chain." Examples of reacting to change include specialty food, new retail formats, extended opening hours and in-store technology.

In all, then, the study raises good questions, but finds there is no way to establish answers with great precision. Indeed, it suggests that supporting data will probably never be forthcoming, so food retailers themselves "need to agree on what measures most adequately reflect its net contributions ... and to communicate [them] to key audiences." A good project.