Abstract

This paper explores the effect of place and transport on food-retail and food-production SMEs in peripheral regions, with an emphasis on the challenges faced by rural enterprises in respect to logistics and their supply chains. To capture extremes of rurality, food based SMEs in Scottish island communities with less than 200 inhabitants were studied. This paper reports data gathered from 58 semi-structured interviews, with business owners, transport providers, community groups and local councils. Small and medium-sized food enterprises are identified as integral to the economic sustainability of island communities. Moreover, they are centres of community spirit and island social life; with survival of the local grocery store considered essential for the well being of the increasingly ageing populations. Given the peripherality and small local market, competition is often fierce, but enterprises are forced to cooperate, especially regarding transport, which often constrains business activity. Literature suggests that the internet should aid rural SMEs in developing beyond their local area, but this study has found that the availability of transport connections, as well as the added time and cost for transport are still serious disadvantages in competing with businesses on the mainland. However, the internet has simplified procurement significantly, enabling business owners to make comparisons and to generally acquire items at a lower price. The impact of different levels of transport connectivity on food businesses in the investigated communities is also considered.