Competition in the Supermarket Sector in Latin America

Market Structure, Growth and Competition in the Supermarket Sector in Latin America, by Juan Delgado. Background note for Session III of the 13th meeting of the OECD-IDB Latin American Competition Forum on 23-24 September 2015 in Jamaica. September 2015.

Op-ed: Competition in the Supermarket Sector in Latin America. Competition Policy International. Latin America Column. 26 October 2015.

Supermarkets play a limited but increasingly important role in Latin-America groceries retail markets. Traditional grocery retailers still play a substantial role in most Latin American countries and the penetration of supermarkets is still behind the developed countries. Paradoxically, within the supermarkets sector, concentration is high and a small number of large players are present in several countries. As personal income increases, the size of the middle class grows and the logistics and transport infrastructure develops, supermarkets are expected to expand further becoming the main gatekeeper for most grocery products. As supermarkets penetration increases, there is generally a process of transfer of market power from manufacturers and producers to retailers. In Latin America, producers and manufacturers still have substantial market power (and, consequently, bargaining power) in several product markets. However, recent cases and commercial practices show that such bargaining power is eroding in favour of large supermarket chains, changing the competitive dynamics of retail markets.

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