Variations in supplier relations operating within voluntary groups: historical perspectives on relationships and social justice in the independent retail sector

Woodruffe-Burton, Helen and Jackson, Keith (2011) Variations in supplier relations operating within voluntary groups: historical perspectives on relationships and social justice in the independent retail sector. In: 27th Annual Conference of the IMP Group: The impact of globalization on networks and relationship dynamics, 30 August - 3 September 2011, Glasgow, UK.

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Abstract

The convenience store sector evolved from the variety of small retailers operating in the 1950’s and is still dominated (in store numbers) by SMEs operating smaller stores (usually smaller than 3,000 sq ft.); trading extended hours; with a base around confectionary, tobacco and news (CTN) and off licence. In the 1980s as more independent retailers adopted the new convenience format the convenience sector spread geographically to fill the increasing demand for local stores with extended hours. Once geographic saturation was reached the main independent supply chains within the convenience sector adopted either a broadly coordinated embedded network through voluntary symbol groups or a broadly cooperative supply chain through cash and carries and delivered wholesalers. Various writers have argued that networking and the building of social capital (as in the voluntary symbol groups) is vital for SME growth whilst Jack and Anderson (2002) have demonstrated that entrepreneurs embedding themselves within a network may be sacrificing their entrepreneurial capabilities.

Around 2000, the major retail multiples and the COOP entered the convenience sector. By using their extensive knowledge of Supply Chain Management (SCM) they were able to gain commercial advantage over the existing supply chains which focused these chains on the need for economic efficiency. This meant that the businesses within the voluntary groups had to choose between the mechanisms highlighted by Payan (2000) of economic efficiency with increased dependence on the centre and the mechanisms of social justice within the group that allowed independent actions within the group. Possibly because of these mechanisms, distinct differences in the types of relationships started to appear between suppliers and independent retailers within each of the voluntary groups. New (1997) highlighted the two opposing forces facing independent retailers operating within voluntary groups; the drive for profit for the whole group and the desire for a perceived fair share of that profit for individual members of the group.

This paper introduces work currently under way to investigate causal configurations of market forces and the social history of a sector that jointly dictate the relationship choices of SMEs within the supply chain. Envisaging a critical realist approach, the aim of the research is to develop understanding of current relationship choices and identify causal mechanisms that would explain how these choices affect independent retailers today.

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