Small produce stalls cannot afford to match the chains' produce discount, and their market share is gradually being eroded. The emerging marketing system is changing not only the kinds of produce demanded by Mexican households, but its quality, consistency, packaging, and handling. The development of U.S. supermarket chainstore operations in the 1950's and 1960's was spurred in part by infrastructure development. The U.S. interstate highway system and the growth of refrigerated truck transportation freed produce shippers from dependence on railroads and allowed deliveries to facilities outside central market districts. This enabled chain stores to build their own distribution centers and accommodate high-volume direct shipments from producers under central inventory control.
Chains benefit from economies of scale in storage, distribution, and marketing.
The higher a firm's sales volume, the more widely it can spread its fixed costs. Greater sales volume also yields more predictable demand and lower inventory risk. However, to realize these efficiencies, chain stores need a guaranteed flow of consistent quality produce to serve consumer demand. For a tightly managed inventory system to work, the entire supply chain must be coordinated. So chain stores are willing to pay a premium for these services.