What factor is said to intensify the bargaining power of chain retailers?

The factor that intensifies the bargaining power of chain retailers is the credible threat of backward integration. This concept refers to the ability of retailers to potentially take control of the supply chain by producing the products themselves or purchasing key suppliers. When retailers have the option to integrate backward, they can negotiate better terms and prices with manufacturers because they are not entirely dependent on them. This threat can create leverage in negotiations, prompting manufacturers to offer more favorable terms to avoid losing business.

When chain retailers demonstrate that they have the resources and capability to produce goods themselves or acquire suppliers, they shift the power dynamics in their favor. This leverage can lead to lower costs, better margins, and ultimately more competitive pricing for consumers. Retailers that possess this credible threat can exert significant influence over suppliers, shaping the terms of their relationships and transactions.