Social Impact of Discount Food Retail in Remote Regions

Please address comments and inquiries to: Investment Centre DivisionFood and Agriculture Organization of the United Nations (FAO)

Viale delle Terme di Caracalla - 00153 Rome - ITALYE-mail: Investment-Centre@fao.orgWeb site: www.fao.org/tc/tciFAO Web site: www.fao.org/investment

Report 11/003 EBRD-POL/BUL/ROM

Poland, Bulgaria and Romania

FAO INVESTMENT CENTRE / EBRDCOOPERATION PROGRAMME

REPORT SERIES N. 16 JUNE 2011

Poland, Bulgaria and Rom

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Social Impact of Discount Food Retail in Remote Regions

FAO INVESTMENT CENTRE/EBRDCOOPERATION PROGRAMME

REPORT SERIES N.16 JUNE 2011

Poland, Bulgaria and Romania

POLAND, BULGARIA AND ROMANIA: Social Impact of Discount Food Retail in Remote Regions

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POLAND, BULGARIA AND ROMANIA: Social Impact of Discount Food Retail in Remote Regions

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TABLE OF CONTENTS

Acknowledgements....................................................................................................................... viiAcronyms.and.Abbreviations........................................................................................................ viiiExecutive.Summary.......................................................................................................................ix1.. Introduction..............................................................................................................................1

1.1 Background ......................................................................................................................11.2 Objectives .........................................................................................................................11.3 Methodology ....................................................................................................................11.4 Organization .....................................................................................................................4

2.. Demographic.and.Socio-Economic.Analysis.ofRegions.inPoland,.Bulgaria.and.Romania.........52.1 Demographic Analysis ......................................................................................................5

2.1.1 Population & Change ..............................................................................................52.1.2 Population Density ..................................................................................................62.1.3 Age Structure ..........................................................................................................7

2.2 Socio-Economic Analysis .................................................................................................82.2.1 Income ....................................................................................................................82.2.2 Unemployment ........................................................................................................92.2.3 Mobility and Car Ownership ................................................................................. 102.2.4 Importance ofthe Agricultural Sector ................................................................... 11

2.3 Statistical Analysis .......................................................................................................... 132.4 Summary ........................................................................................................................ 17

3.. The.Transformation.ofthe.Retail.Industry.............................................................................. 183.1 Stages inthe Transformation ofthe Retail Industry ........................................................ 18

3.1.1 State Controlled Retailing During the Pre-liberalization Period......................... 193.1.2 Privation and Restructuring ofRetailing During Transition .................................. 213.1.3 Foreign Investment and Globalization ofRetailing ............................................... 22

4.. Recent.Developments.and.Effects............................................................................................ 254.1.1 Continued Growth ofModern Retail .................................................................... 254.1.2 Diversification and Growth ofHypermarkets and Discount Formats ................... 264.1.3 Retail Investments inSmall Towns and More Remote Areas ................................. 294.1.4 Continued Growth ofForeign Participation .......................................................... 304.1.5 Increasing Concentration ...................................................................................... 304.1.6 Shift Towards Private Standards ............................................................................ 32

5.. Impacts.onConsumers,.Producers,.Traditional.Retail.and.Rural.Society................................. 365.1 Impact onConsumers ..................................................................................................... 36

5.1.1 Impact onConsumer Choice and Shopping Behavior ........................................... 365.1.2 Impact onConsumer Prices .................................................................................. 375.1.3 Impact onProduct Quality .................................................................................... 425.1.4 Impact onProduct Variety .................................................................................... 435.1.5 Impact onDietary Trends ..................................................................................... 45

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5.1.6 Type ofConsumers ................................................................................................ 495.1.7 The impact ofRural Infrastructure ....................................................................... 515.1.8 Impact onRural Services ....................................................................................... 51

5.2 Impact onProducers ....................................................................................................... 545.2.1 Changes inthe Supply Chain................................................................................. 555.2.2 Impact onProcessing Companies .......................................................................... 585.2.3 Impact onSmall Producers ................................................................................... 585.2.4 Impact onAgricultural Employment and Incomes ................................................ 61

5.3 Impact onTraditional Retailers ...................................................................................... 665.4 Impact onEmployment .................................................................................................. 70

5.4.1 Impact onthe Type ofRetail Employment ............................................................ 705.4.2 Impact onthe Quality ofRetail Employment ........................................................ 71

5.5.Gender.Effects........................................................................................................................ 765.6. Impact.onSocial.Cohesion...................................................................................................... 796.. References.............................................................................................................................. 817.. Appendix................................................................................................................................ 88

7.1 Regional Change inPopulation ...................................................................................... 887.2 Regional Population Density .......................................................................................... 957.3 Regional Age Structure ................................................................................................. 1057.4 Regional GDP per capita ....................................................................