...The supermarket retail sector in UK has started as a fundamental part of the retail industry, that leading the food retailing (Shitti et all, 2006, P.94). The supermarket sector has an essential influence on the retail industry. The UK supermarket sector is led by few companies, Tesco, ASDA, Sainsbury, Safeway, Morrison and Co-op Group that control over 50% of grocery retail. A shift in consumer lifestyle has changed retail industry to offer a diversity of services. (Agriculture and Agri-Food Canada)) The UK grocery has been classified with a wide range of formats including Hypermarkets, Superstores, Discounters and Convenience stores. Generally, food retailers were developed from a highly simple source then they established a sound successful business, interspersed by failure (Williamson et al. 2004). The UK competing supermarkets in the retail industry are; 1. Morrison The supermarket was established in 1899 by William Morrison. In 1962, he purchased the Victoria Supermarket out of town. The growth of Morrison went steadily to increase their stores from 45 in 1990 to 81 in 1996 located in towns that close to main roads. It has been regarded as a leader in Sale-Based Ordering (SBO). Customers consider Morison chains as price competitive. Morrison is considered as the pioneer in feature of Market Street 2. Tesco It is classified as the market leader in grocery retailing that reached 545 outlets by 1996 guided by formula ‘pile it high, sell it cheap’. Tesco...
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...Supply Chain Management: An International Journal Emerald Article: Innovation and competition in UK supermarkets Mark Harvey Article information: To cite this document: Mark Harvey, (2000),"Innovation and competition in UK supermarkets", Supply Chain Management: An International Journal, Vol. 5 Iss: 1 pp. 15 - 21 Permanent link to this document: http://dx.doi.org/10.1108/13598540010294892 Downloaded on: 16-10-2012 References: This document contains references to 8 other documents Citations: This document has been cited by 8 other documents To copy this document: permissions@emeraldinsight.com Users who downloaded this Article also downloaded: * Ronan de Kervenoael, Catherine Canning, Mark Palmer, Alan Hallsworth, (2011),"Challenging market conventions: Supermarket diversification and consumer resistance in children's apparel purchases", Journal of Fashion Marketing and Management, Vol. 15 Iss: 4 pp. 464 - 485 http://dx.doi.org/10.1108/13612021111169951 Andrew Hollingsworth, (2004),"Increasing retail concentration: Evidence from the UK food retail sector", British Food Journal, Vol. 106 Iss: 8 pp. 629 - 638 http://dx.doi.org/10.1108/00070700410553611 Torben Hansen, Jan Møller Jensen, Hans Stubbe Solgaard, (2011),"When supermarket consumers get stocked in the middle", International Journal of Retail & Distribution Management, Vol. 39 Iss: 11 pp. 836 - 850 http://dx.doi.org/10.1108/09590551111177954 Access to this document was granted through an Emerald subscription provided...
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...Outline the argument that supermarket power is a ‘zero-sum’ game Basic necessities such as food are required for survival and we rely particularly on supermarkets and small businesses to make them available for purchase in contemporary UK. Power is a combination of influence control and/or dominance. Supermarket are to some extreme shaping our shopping choices by the variety they choose to stock and by seduction. Recent years have seen the supermarket gain a considerable degree of power by extending their ranges of goods and services, extending opening hours and expanding into local areas with superstores and convenience stores as well as on the High Street. Supermarkets expansion has resulted in the suffering and closure of many small local businesses. Dennis Wrong, Socioligist states that in a situation where the gain of one is equivalent to the loss of another so the net gain is zero, it is a ‘zero-sum’ game. This essay examines the relationship between supermarket power and a ‘zero- sum’ game. It shows how the supermarkets gain is balanced by the loss to others and outlines the ‘positive sum’ games of power. The concept of power is viewed in variety of ways by different groups, I feel this depends on the angle you are viewing things from. Contemporary UK has four huge supermarket chains, Asda, Morrisons, Sainsbury’s and Tesco often referred to as ‘giants’ by the economy which indicates the level of power and dominance they have in the market. Every consumer has personal...
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...com/statistics/279900/grocery-market-share-in-the-united-kingdom-uk/ 2013: 17.2% 2012: 17.6% http://www.theguardian.com/business/2013/nov/19/britain-supermarkets-market-share-fall-tesco-sainsburys-lidl 2011: 17.1% 2010: 17.6% http://www.theguardian.com/business/2011/aug/16/supermarkets-market-share-kantar 2009: 17% http://www.economicshelp.org/blog/6288/economics/uk-grocery-market-share/ The table on the right shows ASDA’s market share from 2009 to 2014, as you can see they have had a mixture of growths, at times the growth declined. Currently their market share is at 17.2%, which means they have the second highest percentage, they are only behind Tesco. ASDA’s newest news on what’s going on within the company would be the false advertising, this has been a big problem for them. The problem was that they stated in their advertisement that they had many products cheaper than Argos, although that may be true the way the stated it was wrong. They had said to have around 139 products that were cheaper than the ones sold In Argos and they also said that an independence price checker found out this information. However this figure that ASDA had generated and advertised was completely wrong. In fact Argos had much more cheaper products, Argos had claimed to have around 336 products which were cheaper in their stores compared to ASDA. Due to this problem, it caused many ASDA customers to find alternative supermarkets to shop at as this cause and raised many trust issues...
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...Supermarket Industry Porters 5 Force’s Porter (1980) illustrates in this analytical tool 5 variables that determine the attractiveness of an industry for organisations in terms of profitability in their immediate environment. Using the forces in this model we can analyse how attractive the UK Supermarket industry is to enter, the 5 forces are as follows. The threat of potential new entrants Barriers to entry in the UK supermarket industry relies on the entrants capability of matching capital requirements of existing firms, the UK supermarket industry is dominated by firms known as Tesco, Asda, Sainsbury’s and Morrison’s (Big 4) owing up to 69% of market share in the UK. Looking at the experience curve (1960: Boston Consultancy Group) A new entrant would have to achieve the economies of scale needed to achieve cost parity with the big 4 and compete on cost advantage. In the supermarket industry achieving economies of scale is not on production but other factors such as efficiency, pricing, range of goods and value of products. Tesco for example have very low cost margins in comparison to the scale of their operations and distribution channels but they are able to achieve high sales because the convenience, range of products and different services they offer. Product differentiation is another barrier to entry, a new entrant would need to achieve and individual level of differentiation and attain an identity through promotions and costly advertising, total advertising...
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...What’s wrong with Supermarkets www.corporatewatch.org.uk Strip lights, endless queues of strangers and shelves of packets, fake smiles from bored checkout assistants isn't there a better way to get our food? Supermarkets wield immense power over the way we grow, buy and eat our food. They are shaping our environment, our health and the way we interact socially. These changes have gone unchallenged because consumers have been sucked into superstore lifestyles, persuaded that the opportunity to select from six different brands of cut-price oven chips at three in the morning represents choice and value. What’s Wrong With SUPERMARKETS But the tide may be turning. Unease at the true cost of supermarket food is spreading among consumers, who are beginning to join forces with the farmers and workers who have always known that supermarket 'choice' is a bad deal. This booklet aims to help campaigners get to grips with the reality of supermarket domination and argues why we must start looking for alternatives. Researched and written by Lucy Michaels and the Agriculture Project at Corporate Watch What’s wrong with Supermarkets www.corporatewatch.org.uk What's Wrong with Supermarkets? Overview: Supermarkets sweep up 2 3 10 11 The supermarkets we know today started in Britain with the Cooperative Movement in the 19th century. This was a group of independent local retailers controlled by its consumer members...
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...2012 UK retail sales were over £311 Billion, taking account for around 20% of Total GDP. If we break this down further, food retail sales in the same year were worth around £163 Billion accounting for over half of all retail sales meaning that on average out of every £1 spent in the UK retail market, 50p of it is spent in a supermarket. This figure is set to increase to around £162 Billion by the end of 2013 as seen below in figure 1. The UK food markets is made up of; superstores, small supermarkets, convenience stores, discounters and online retailers (Figure 2). Supermarket companies such as Tesco own around 6,000 stores worldwide, consisting of the first four store types and making up the largest proportion of the UK food market with a share of around 30%. In fact if we are to look at the top ten UK retailers in general, 6 of them are food retailers, namely; Tesco, Asda, Sainsbury’s, Morrison’s, Co-operative and Marks and Spencer. This is due to the type of product these retailers offer. They are un-substitutable in general terms to the consumer. They may be substitutes in terms of where the consumers chooses to buy them, however in general terms all people must eat. This is where complimentary and substitute goods play a big role in the food retail market. In a market with an oligopoly structure, it is dominated by a few large firms and therefore their products are differentiated by either branding or tastes and personal preferences. Here supermarket must...
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...following assessment has taken information from Tescos own website on its financial and annual review report. 2012 has been a challenging year for the leading supermarkets due to high fuel costs, high taxes, real incomes not growing so people are adjusting their shopping habits. The UK's biggest supermarket chain, Tesco, has reported its first fall in profits since 1994. Pre-tax profit for the six months to 25 August came in at £1.7bn, down 11.6% from the same period last year. The fall in profits was largely due to spending on the retailer's £1bn investment programme to improve its UK stores, which was announced by chief executive Philip Clarke in April. Mr Clarke put that down to the investment programme, which has already put 8,000 additional staff in existing stores at a cost of £200m a year. He also said that the Everyday Value range was growing fast due to the pressure being felt by customers. "They tell us they're resigned that this is the new norm. They don't have great expectations that things are going to improve in the short term," Tesco is investing £1bn in its UK stores and the money is beginning to show, although little of it is revolutionary. Modest profit growth is observed through 2011/2012 due to challenging economic conditions, strong international growth at the offset of reduction in UK profits. Tesco group sales increased by 7.4% to £72bn, group trading profit up 1.3% from previous year and profit before tax up to £3.9bn an increase of 1.6%. A...
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...TESCO PLC is a British multinational grocery and general merchandise retailer based in Welwyn Garden City, Hertfordshire, United Kingdom. Jack Cohen founded Tesco in 1919. Currently it is a biggest grocery market leader in the UK with a market share of around 31%. Tesco Plc is the second and third biggest grocery retailer worldwide measured by revenue and profit respectively. Initially, a retail grocery store in United Kingdom since 1990s by Tesco Plc has differential geographically and in areas as the retail sale of clothes, toys, books, gasoline, electronic, software, furniture, telecommunications, internet service and financial services. In 1990 saw the Tesco Plc reattached transferred than to be a down market high volume low cost retailer, to that addressed in several group in society, offering products ranging from “Tesco Value” data in “Tesco Finest” This enlargement of the recourse was winning and saw the chain grow 500 stores in the middle of 1990s to 2500 fifteen year beyond. Tesco Plc is listed on a stock exchange market and is included in FTSE 100. Market capitalization is around £18.100.000, such as at April 2015, 28th greatest from any company with a primordial listing on London Stock Exchange. The key issue company can face when choosing to operate under the cost model is that due to low profit margins grocery retailers become more vulnerable to external circumstances, such as financial crisis or natural disaster, and does not have sufficient capital to cover...
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...An Investigation of Competition within the UK Food Retail Industry Abstract This dissertation set out to explore the nature of competition within the UK Food Retail Industry as well as to evaluate the competitive strategies undertaken by firms in the market. This task has been undertaken through a critical analysis of a range of literature focussed on establishing the current state of play in the UK supermarket industry, examining general theory on competition and competitive strategy, as well as a review of literature that specifically addresses competition between supermarkets in the UK. Looking first at the nature of competition in the UK food retail industry, it was clear from the literature review that while the industry has many characteristics of an oligopoly as it is dominated by a small number of major firms, it is undoubtedly highly competitive. The evaluation of the competitive strategies undertaken by firms in the industry showed that between the leading firms in the market that Tesco had the best balance between price and customer perceived value but there was clear evidence to suggest that the other leading firms were positioning themselves around Tesco in order to reduce its apparent competitive advantages. While the analysis showed similar competitive strategies for the big four, it revealed different strategies being adopted by other firms in the industry who look to operate in niche markets within the food retail industry, such as Lidl and Aldi, who compete...
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...FOUNDATION TO BUSINESS STRATEGY ALDI ALDI is one of the world’s leading grocery retailers with more than 7,000 stores across 70 countries. The company originates from Germany, where it was founded in 1913 as one of the first retailers to offer self-service. Since opening its first store in 1913, ALDI has established itself as a reputable retailer operating in international markets including Germany, Australia, UK, and the U.S. What distinguishes ALDI from its competitors is its pricing strategy without reducing the quality of its products. In fact, in some cases ALDI’s products are 30% cheaper than those offered by its competitors. ALDI can do this because the business operates so efficiently. ALDI has operated in the UK since 1990, and now has over 500 stores in the UK and Ireland employing in excess of 20,000 people. ALDI’S POLICIES: ALDI does not have a clear defined Vision and mission statements, however it has clearly defined policies based on which it could create its competitive position in the market. ALDI’S Policies are based on ‘What if a grocery store challenged the typical retail business model?’ALDI’s business model enables to provide the customers the highest quality products at the lowest possible prices. This value stems from the numerous efficiencies and innovations instituted at every level of ALDI’S operation. The following are the cost saving strategies that ALDI adopts: * Customers bring their own bags or buy our reusable bags to save money ...
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...PHOTOCOPIED TESCO PLC CASE STUDY © MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED ML00001-041/Published 12/2011 Page | 1 OVERVIEW Catalyst Tesco is the largest retailer in the UK and dominates the UK food and grocery market, accounting for almost a third of all grocery sales. This case study examines the factors that have led to the growth of the company as the UK’s number one retailer. Summary In 1995, Tesco overtook Sainsbury’s to become the UK’s largest retailer. Since that time the company has grown from strength to strength, widening its lead year on year. The unrivaled success of the Tesco Clubcard in building customer knowledge and generating loyalty has been fundamental to the rise of Tesco. The company has created a powerful brand and a number of valuable sub-brands including store, product and service brands. Tesco’s grocery product brands tend to center around a three-tier branding system, allowing the company to appeal to a mass market. Tesco has been a forerunner in the price competitive environment of the UK food and grocery market, utilizing its economies of scale to lead price wars with other supermarkets. The company has grown inorganically, buying out various independent grocers and supermarket chains over the years. The wide range and sheer number of stores has been a significant factor in driving sales growth for the company. Tesco has diversified from traditional food retail, selling a wide range of...
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...examines the UK clothing retailing market, which comprises of women’s, men’s and children’s clothes, as well as clothing accessories. This Key Note Market Report examines the UK clothing retailing market, which comprises of women’s, men’s and children’s clothes, as well as clothing accessories. Consumer spending on clothing increased by 12.5% between 2006 and 2010, which was slightly below the rate at which overall consumer expenditure increased (12.9%). In 2010, it was estimated that the clothing retailing market was worth £41.9bn, which was the highest value seen over the review period. Key Note believes that supermarkets have increased their share of the clothing market, now accounting for around 25% of the total market. Supermarket retailers have witnessed a large increase in sales since the recession, as consumers became more cautious about unnecessary spending, and turn to cheaper alternatives available in the supermarkets. There has also been a decline in specialist companies operating within the clothing retailing industry, with figures from National Statistics indicating that, in 2010, there were 11,800 shops, compared to 12,700 in 2009; this represents a 7.1% decrease over the course of that year. This phenomenon is visible in many UK cities, where an increase in empty high-street shops is apparent. Many independent shops were forced to exit the market after the recession, as they could not compete with the larger well-known retailers and supermarkets. The cost...
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...across Asia and Europe and is the grocery market leader in the UK, Ireland, Hungary, Malaysia, and Thailand. Mission Tesco’s business was built with a simple mission – to be the champion for customers, helping them to enjoy a better quality of life and an easier way of living. This hasn’t changed. Customers want great products at great value which they can buy easily and it’s Tesco job to deliver this in the right way for them. That’s why we’ve chosen ‘Serving Britain’s shoppers a little better every day’ as the new core purpose. As a business, serving customers is at the heart of everything we do – from colleagues in its stores to those of its in supporting roles. In the UK, Tesco serve some 66 shoppers every second, so it’s Tesco goal to ensure every one of those customers experiences just a little better service on each visit. PESTLE Using PESTLE analysis to analyse to business environment of Tesco. Political Many governments encourage retailers to create more career opportunities for the domestic population. So Tesco plays its role in providing employment opportunities, it also increases the demand for its products and diversifies its workforce. Economic Tesco is concerning any changing in policies, such as taxation. Although Tesco is growing internationally, it is still concern the UK market where it has a market share of around 30%. It helps Tesco to expand its brand in UK. Social The Uk customers have moved towards bulk shopping, so that Tesco has increased...
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...The external environment in which businesses operate can have a significant effect on their success. To what extent do you think that the external environment in the UK is favourable for businesses at the moment? Justify your answer with reference to external factors and/or businesses that you know. (40 Marks). Now at the start of 2013 the UK is at the recovering stage in the business cycle after, a double dip recession which saw a mass slow down of economic activity. The effects of the recession can still be felt, for example consumers with less disposable income, therefore un-willing to spend and due to quantitive easing measures taking place,interest rates are still at a record low of 0.5%. An external environment is something that can influence your business from the outside but is out off your control. The economic system can be seen as the largest external environment in this situation. The extent that the external environment in the UK is favourable depends on many different factors. One way in which the external environment is favourable to UK retailers at the moment (2013) depends on the product and what kind of business it is. For example people are currently suffering economically therefore have less disposable income, so business selling cheaper goods for their market wont be affected as people will be willing to buy from them to spend the lest amount possible, this recession and recovery stage may even be great for them as more and more people will have to...
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