This paper assesses whether supermarkets adversely affect traditional food retailers in traditional markets of Indonesia. The study methodology involved data collection from traders in treatment (supermarket within 5km) markets (n=249), traders in control markets (n=151) and in-depth interviews (n=37) with a range of additional stakeholders. The paper reports no significant effect of supermarkets on traditional markets in terms of profit and revenue, yet traditional traders experienced continued decline in their business. Discussion of the qualitative data provides explanatory information to support this result. This includes consumer preferences and perception of the alternative shopping experiences, preference for continuing existing long term business relationships, differing consumer segments, and the intense competitions between traditional food retailers and other traders and street vendors (66.2% of traders perceive other traders and street vendors as their main competitors). The paper outlines policy recommendations that would increase the competitiveness of the traditional markets including: improved traditional market infrastructure; improved market management practices; organisation/regulation of street vendors. The author does highlight the short term of the study and a longer term study may reveal additional findings.
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Paper prepared for presentation at the 'The supermarket revolution in food: good, bad or ugly for the world's farmers, consumers and retailers?' Conference conducted by the Crawford Fund for International Agricultural Research