Authors: Helen Woodruffe-Burton; Keith Jackson
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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Conference: Glasgow, Scotland (2011)