The Economic Impact of Supermarket Growth in Vietnamese Food Supply Chains

Supermarkets and other modern distribution outlets are sprouting in the cities of Vietnam to market goods to an emerging middle class, resulting in significant changes in the structure and operation of food supply chains.

The sustainability literature advocates a multiple stakeholder approach to the analysis of structural change in global food markets, yet the debate over the impact of the global expansion of supermarkets appears to take inadequate account of displacement impacts on local food economies in general and lower income groups in particular.

This paper analyses the growth of the modern distribution sector in Hanoi and Ho Chi Minh City. It then identifies the economic impacts of supermarket growth on different stakeholders in the food marketing system of Vietnamese cities.

The findings suggest that whilst supermarkets are encouraging the production of “safe” food, which is likely to have a positive impact on the environment and consumer health, the employment created by supermarkets is limited compared with traditional markets, larger-scale farming is preferred and many smallholders, traders and poorer consumers are excluded from the modern food marketing system.