Case Study: Produce supply chain – two tales in one city

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Retail Produce Supply Management – Two Tales in One City | Executive Summary

Produce retailers face challenges in produce and vegetable purchasing every day. The products are perishable mandating fast inventory turns. As more customers demand natural and organic produce and vegetable products, in recent years traditional retailers, both national chains and local grocery stores, face competition from niche natural food stores and Farmer’s Market. The growing demand of social and environmental sustainability creates both opportunity and challenges for retailers and changing how they manage logistics/inventory, supply relationship, product branding and pricing decisions.

This teaching case illustrates the challenges and opportunities in retail produce and vegetable supply management. It investigates the produce and vegetable department of two grocery retailers: Richey’s Market, a family-owned local grocery store in a college town in Oregon and Fred Meyer, a subsidiary of Kroger, a large national chain. It then compares and contrasts the different supply management practices in these two companies and illustrates the purchasing processes and how supply manager interact with suppliers, distributor and wholesalers. The case also provides an analysis of the different organizational structure that determines the decision processes, decision autonomy and performance implications.

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