This paper looks into the UK Supermarket Industry in 2014 with an in depth PESTEL analysis of the external factors influencing the Supermarket Industry. It also introduces the main competitors in the industry namely, Tesco, Sainsbury's, Asda and Morrisons and the two German discounters that are rapidly gaining market share in the UK, looking at the competitive arena with the help of Porter's Five Forces.
Table of Contents
Introduction
Introduction to the UK Supermarket Industry
PEEST Analysis
Political
Economic
Social
Technological
Environmental
Legal
Porter’s Five Forces
Threat of Substitute Products and Services
Threat of Entry of New Competitors
Intensity of competitive rivalry
Bargaining Power of Buyers
Bargaining Power of Suppliers:
Positioning of Competitors
Tesco
Sainsbury’s
ASDA
Wm Morrison
ALDI
LIDL
Conclusion
Objectives and Topics
This business analysis aims to provide a comprehensive overview of the factors influencing the UK supermarket industry and to evaluate the competitive landscape using established strategic frameworks. The research seeks to identify key external drivers and assess how major market players respond to these challenges.
- External macro-environmental analysis using the PEEST framework.
- Competitive landscape assessment based on Porter’s Five Forces.
- Detailed profiles of major retailers including the "big four" and discount chains.
- Evaluation of industry trends such as online grocery growth and price competition.
- Strategic assessment of future market opportunities and threats.
Excerpt from the Book
Social
Social factors that have an impact on the UK supermarket industry are either a result of the impact the economic situation has had on consumer behaviour or general buying habits of consumers.
One of the factors that fall under the category general buying habits is tradition. Tradition can play a big role for customers in deciding where they do their food shopping. For example if your family has always gone shopping at Tesco then you might continue to only go shopping at Tesco. Another one of these factors could be loyalty not only in terms of “we have always shopped there and received good service, so we will continue to shop there”, but also in terms of I have a child, parent, girlfriend/boyfriend working at ASDA so I will support them by supporting ASDA and only shopping there.
For some people where they shop might be a form of status symbol. People who choose to go food shopping at M&S are less likely to switch and start shopping at one of the discounters like Aldi and Lidl. This shopping habit may well be the consumer saying, I have the money so I am going to spend it in the more expensive food stores. Others might feel they are losing face if they shop in discount supermarkets, the same phenomenon that shows for people that have no other choice than to buy their clothes and such in thrift shops. These two examples show that people may be influenced in their food shopping behaviour through the assumption that they are being judged by where they shop.
Summary of Chapters
Introduction: Outlines the scope of the analysis, focusing on the external factors influencing the UK supermarket industry and the methodologies applied.
Introduction to the UK Supermarket Industry: Provides a statistical overview of the market, highlighting recent growth trends and the impact of the financial crisis.
PEEST Analysis: Examines the macro-environmental influences on the industry, specifically Political, Economic, Social, Technological, Environmental, and Legal factors.
Porter’s Five Forces: Analyzes the competitive structure of the industry, assessing power dynamics between buyers, suppliers, and new entrants.
Positioning of Competitors: Profiles the major supermarket chains, including the "big four" (Tesco, Sainsbury’s, ASDA, Wm Morrison) and the rise of discounters (Aldi, Lidl).
Conclusion: Summarizes the key findings and provides a SWOT analysis to illustrate the future outlook for the industry.
Keywords
UK Supermarket Industry, PEEST Analysis, Porter’s Five Forces, Retail Strategy, Market Share, Tesco, Sainsbury’s, ASDA, Wm Morrison, Aldi, Lidl, Consumer Behaviour, Online Grocery, Corporate Social Responsibility, Price Competition.
Frequently Asked Questions
What is the primary focus of this business analysis?
The work provides a detailed examination of the UK supermarket industry, analyzing the external macro-environmental factors and the competitive rivalry among major grocery retailers.
Which frameworks are utilized to analyze the industry?
The author employs a PEEST analysis to evaluate the external environment and Porter’s Five Forces to assess the specific competitive dynamics within the sector.
What is the main objective of this study?
The objective is to understand the drivers of the industry and how individual companies adapt their strategies to respond to changing consumer behavior and market threats.
How is the market performance of supermarkets described in the text?
The analysis tracks the market share of major chains and highlights the significant growth and competitive threat posed by German discounters like Aldi and Lidl.
What specific aspects of consumer behavior are covered?
The text explores how social traditions, status symbols, price sensitivity, and the growing demand for convenience and online shopping influence where customers choose to shop.
Which key factors influence the industry's legislative and regulatory landscape?
The work identifies competition law, planning policy (PPG6), consumer rights legislation, and health and safety regulations as primary legal factors impacting retailers.
How do "big four" retailers compete against the rise of discounters?
They utilize loyalty programs, price-matching schemes, diversified services like online shopping, and focus on CSR to retain their customer base.
What is the author's conclusion regarding the industry's future?
The author believes that despite recent challenges and the loss of market share for the "big four," the industry holds significant growth potential as the economy recovers.
- Citation du texte
- Kathrin Metzger (Auteur), 2014, Business Analysis of UK Supermarket Industry, Munich, GRIN Verlag, https://www.grin.com/document/278978
