Can Large Retailers Localize Supply Chains? A Case Analysis of the Challenges Facing One Canadian Retailer

Abstract

Extensive access to a major Canadian retailer (referred to as the Company) provided an opportunity to understand more fully its challenges when buying local food. Many of the Company volume and quality requirements of vendors are difficult to meet because they require a scale sophistication that is typically absent for local growers. Particularly challenging are the needs to lengthen product life, coordinate transport, and aggregate supply. Liability associated with spoiled product is especially onerous for small growers. Using a value supply-chain framework (Stevenson & Pirog, 2008), we conclude that the steps taken by the retailer toward localization will not be successful without significant investments in product differentiation, the financial health of their supplier base, strategic alliances, and shared governance.