The transactions between supermarkets and fresh fruit and vegetables (FFV) suppliers in the São Paulo, Brazil

Abstract

The objective of this article is to characterize the strategies used by three different retail formats (large retail chains, associations of small and mid-size supermarkets and independent supermarkets) in their purchase of fruit and vegetables, focused on the issue of quality standard requirements of the different retail formats in the city of São Paulo. The conceptual approach uses the economic theory of transaction costs. The empirical part of the project uses the method of multiple case studies, which was made viable by face-to-face interviews with representatives from the different kinds of retail businesses in Sao Paulo. The outcome indicates that there are differences in the procurement strategies at different retail formats. For small and medium supermarkets, the supply of fresh fruit and vegetables by the Sao Paulo Wholesale Trading Terminal of fresh food (called Ceagesp) is still representative. Even in the case of large retailers, about 25% of FFV is provided by "Ceagesp", which characterizes an arm's length relationship as a procurement strategy. The other part is supplied by distributors of origin, which can be considered first-tier suppliers.