Developing backward linkage for supermarket in Bangladesh: An empirical study

Abstract

Supermarket business is becoming popular day by day in Bangladesh. Fresh vegetables are one of their basic commodity among hundreds of product range. However, supply chain of fresh vegetable in supermarket is very complex now because of the involvement of multiple parties. Though fresh vegetables are sold in local marketplace through traditional retailers most of the supermarkets carry a large volume of inventory of vegetables in Bangladesh. At Present, a large number of middlemen are involved in dealings of fresh vegetable that increases cost. On the other hand, because of the absence of information technology the market prediction is difficult which results the considerable wastage of vegetables. These are all increasingly becoming the challenges for supply chain of fresh vegetables. The current sourcing process of supermarket shows higher dependency on intermediaries which can be reduced through own farming or procuring vegetables directly from the farmers. But none of the supermarket is so big enough to buy vegetables from the producer directly rather they can collectively buy vegetable from the producers through Bangladesh Supermarket Owners Association (BSOA), an association formed by the owners of supermarkets. The specific objectives of the study are: (i) To examine how the Supermarket maintain a backward linkage , (ii)To evaluate the customer attitude towards Supermarket ,(iii) To assess the cost and the margin of the Middlemen, (iv)To identify the constraints of Vegetable Marketing of Supermarket in Bangladesh, (v)To evaluate the prospects for developing supermarket in Bangladesh . The study is exploratory in nature. For collecting information from farmers, intermediaries and consumers, semi structured questionnaire was developed. The study located mainly in Dhaka City as most of the supermarkets are in Dhaka. We administered our questionnaire on 60 producers, 40 intermediaries and 332 consumers. They were selected on the basis of purposive sampling techniques. The study assessed mainly the vegetable items sold in supermarket in Dhaka city. However, four types of vegetables has been selected based on their sales performance in the supermarkets, these are Brinjal, Cauliflower, Cabbage and Tomato. In the present study, we analyzed our data by employing descriptive statistics and factor analysis. For the study, the entire analysis is done by personal computer (PC). A well known statistical package SPSS (Statistical Package for Social Sciences) 20 Version was used in order to analyze the data. The study shows that 31.7 percent farmers acquire less than 20 years of farming experience, 35 percent farmers acquire 21 to 40 years of farming experience. Moreover, the study shows that 68.3 percent farmers belong to small farm groups. The study shows that net returns of tomato were higher than brinjal, cauliflower and cabbage. On the other hand, cost of production per hectare was higher for brinjal than for tomato, cauliflower and cabbage. The study shows that 25 percent middlemen purchase vegetables from farmers, 27.5 percent middlemen purchase vegetables from traders, and 27.5 percent middlemen purchase vegetables from commission agent. The study also shows that prince bazaar offered brinjal and tomato at lower price compare to other super markets. Both Agora and Meena bazaar charge higher price in the case of cabbage and cauliflower. The study shows that Varimax rotation finds five derived factors-‘Necessities and Cleanliness’, ‘Quality and Environment’ ‘Availability and Price examination’, ‘Image and Store location’ and ‘Enjoyable and Fashionable’ for selecting supermarkets from the consumers point of view.