Halal Retailing: closing the last mile in an end-to-end halal supply chain

The retailer is completing an end-to-end halal supply chain, where the halal product is handed over to the consumer upon payment. This handoff is also known as the point of consumer purchase. The goal of halal retailing is to guarantee the halal integrity of the halal category at the point of consumer purchase through effective control of the halal category supply chain processes.

The following halal retailing formulas can be differentiated:

1. Halal-exclusive retailer. The outlet offers halal products only. The halal category is designed meeting the specific needs and halal requirements of the local Muslim community.
2. Halal-segregated retailer. The outlet offers both halal and non-halal products, which are clearly identified and physically segregated on shelves and displays, to address contamination, risk and perception issues. The halal category is designed to offer as much as possible complete halal category to the mainstream Muslim consumer.
3. Halal-mixed retailer. The outlet offers both halal and non-halal products, but are not clearly identified or physically segregated. The retailer does not recognise a halal category.

For a halal retail standard to be successful it should be able to have different classifications of halal retailers for both OIC and non-OIC countries to stimulate the availability of halal and minimise hardship for both the consumer and retailer. The halal retailing standard should be prescriptive instead of a management standard that leaves the design of halal retailing practices to the retailer, which is currently the case in Malaysia. A halal standard is recommended for a halal-exclusive and halal-segregated retailer in both OIC and non-OIC countries.

As retailers carry thousands of products, decisions on the halalness of products in the category should be supported by halal authorities as these are decisions on the halal or non-halal status of a product. Leaving the decisions to the individual undermines the trust in a halal retailing system.

Retailers in OIC countries have to understand that they are closing the last mile in an end-to-end halal supply chain for a brand owner. This is a heavy responsibility that should be taken seriously. Halal retailing has consequences for sourcing to retail, retail operations, and home delivery services. Halal-exclusive and halal-segregated are suitable models. A halal-mixed retail operations is a model not recommended in OIC countries, as it exposes both the corporate reputation of the halal certified brand owner (supplier) and retailer.

For non-OIC countries, carrying halal products in the assortment of the retailer should be stimulated in ensuring availability of halal product in non-OIC countries. Halal authorities should protect the retailer in its attempt to serve the Muslim community in a non-OIC country and advise retailers in developing a halal category. This to protect that halal can go mainstream in non-OIC countries and improve the availability of halal products, which is currently limited to Muslim shops in big cities only. Non-OIC countries can therefore practice all three models: halal-exclusive, halal-segregated, and halal-mixed retailer.

For the full academic paper written by Prof. Dr. Marco Tieman and Dr. Barbara Ruiz-Bejarano, please visit the ICR Journal.