Factors Determining the Rise of Modern Food Retailing in East Africa: Evidence from Tanzania

The food retail sector has undergone dramatic changes in the East African Community (EAC) since the beginning of this century. Both African and non-African international retail firms have entered the market and have gradually expanded their outreach to the major towns of the various East African countries. Despite the increasing importance of the changes to consumer behaviors and shopping habits, there is a dearth of empirical knowledge about factors influencing the changes, and the opportunities and barriers to growth of the international retail firms operating in the region. This chapter pulls together fragmented theoretical and empirical knowledge about the roles that international retailers play in the EAC countries and to explore the opportunities and barriers to their expansion. It also reports the results of a preliminary investigation of the impact that supermarkets are having on food consumption habits in Tanzania. The analysis suggests that factors such as the growing middle class and wage employment in East Africa combine with the increasing rate of urbanization and lifestyle changes to provide growth opportunities within the retail sector. However, import constraints, inadequate infrastructural facilities, limited availability of good quality local products and administrative bottlenecks act as barriers to growth.