Common prescriptions for improving the performance of supermarket retailers center on using key suppliers as ''category captains'' and leveraging their resources and capabilities to implement effective category management that will both reduce retailer costs and provide a basis for differentiation. However, despite these widespread prescriptions, the potential for supplier opportunism means that supermarket retailers are either skeptical or have failed to make such category management relationships with key suppliers work. Drawing on agency, transaction costs, and network theory, we synthesize insights from qualitative fieldwork with retailer and supplier managers and primary data from 73 category managers in U.K. supermarket retailers to empirically examine antecedents and consequences of category-level focal supplier opportunism. Our findings suggest that focal supplier opportunism decreases retailer category performance and increases militant behaviors among non-focal suppliers in the category supply chain. Consistent with retailer fears, we find that focal suppliers with significant influence in retailers' category management efforts are more likely to engage in opportunistic behavior. However, our results also reveal that retailer fears that being dependent on a focal supplier will lead to greater supplier opportunism are largely unfounded, while supplier dependence on the retailer is also unrelated to focal supplier opportunism. Finally, we find that retailers' ability to monitor -but not to punish -its focal suppliers is negatively related to opportunistic behavior among focal suppliers. #

Category management (CM) is challenging for retailers that sell thousands of products across hundreds of categories and often lack the resources and capabilities to manage all of them intensively. Some retailers respond by picking one supplier to be a "category captain" that manages the category-including rivals' brands-on their behalf. Others worry that influential captains will be opportunistic and that the benefits of intensive CM are simply not worth the costs. However, there is little conceptual development or empirical evidence concerning CM best practices. The authors develop a comprehensive model of retail CM based on a synthesis of field interviews and relevant literature, especially work on governance value analysis theory. Their test of the model using category and financial growth data from U.S. supermarket chains shows that more intensive CM improves results. Furthermore, use of a category captain increases CM effort and results, without increasing opportunism or problems with other suppliers. The authors also find that retailers with more resources are less likely to rely on help from a category captain; yet the level of retailer resources is not related to CM intensity. Thus, "go-it-alone" retailers do not deploy their own resources on CM and miss out on the corresponding performance improvements. ). The authors gratefully acknowledge insightful comments and suggestions in the development of this article from Lopo Rego, Doug Vorhies, and three anonymous JM reviewers for their helpful feedback.

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