Effects of increasing the power of retail chains on competitive position of wholesalers

Abstract

© 2015, Budapest Tech Polytechnical Institution. All rights reserved. Highly noticeable processes of retail market concentration have marked the end of the last and the beginning of this century. The intensive development of retail chains and high-level of increasing of their power caused the shifting of powers, changes of positions and the establishment of new relationships between the members of marketing channels. Retailing revolution which makes substantial changes to former marketing channels is under way. A lack of understanding these changes is especially noticeable on the developing markets where large retail chains assume key roles in creating and managing the channels. Strengthening of their position is more than evident. The position of wholesalers in these trends, i.e. need for their intermediating role between producers and retailers, becomes especially interesting. The situation is alarming, primarily, in the field of food and other fast moving consumer goods, where the changes manifest themselves to a high extent and with special content. Wholesalers are facing a less significant role with growing retailers, which are constantly making more numerous and more complex demands of them. In such conditions, many wholesalers disappear from the market. However, wholesalers still have significant possibilities and advantages of cooperation with large retail chains, which can strengthen their position and ensure survival in the marketing channels. This study confirms it, by proving that increasing the power of retailers brings a higher level of satisfaction for wholesalers and that they achieve a higher level of satisfaction in doing business with large rather than with small and medium-sized retailers.