UK Retail Industry as the Most Growing Industry Over the Years - Dissertation Example

The food retail industry is an important industry for the UK economy as over the years it has been able to contribute a lot to the GDP of the country. In addition to this, the food retail industry is a significant one for the United Kingdom economy as it has been able to consume a considerable portion of the employment. According to a report, more than half a million people are working in the industry representing almost 13% of the total workforce of the United Kingdom. The food retail industry consumed more than 12,750 permanent jobs throughout 2010 which represents an annual growth of 2.1% in the jobs of the food retail industry from 2009 (The Scottish Government, 2010).
There has been an increasing trend of online shopping for people in the UK and this has attracted more people to start online businesses. There are more than 150,000 online retail businesses in the United Kingdom and more than 600,000 people are employed because of the e-retail industry either directly or indirectly. At present, the online retail business contributes only 7% of the total retail industry revenues (Experian Hitwise, 2008), however, it has been predicted that the contribution from the online business would further improve over time.
The total sales of the online retail industry equaled £2.8 billion from December 2009 to December 2010, i.e. in a year the total sales of the industry were equal to £2.8 billion (Internet Retailer, 2011).
Tesco is the market leader in the UK food retail industry for years and it has been dominating the market with a market share of almost 31% (Tesco, 2011). Tesco is also considered the third-largest retailer in the world in terms of revenue, after Wal-Mart and Carrefour. Tesco recorded total revenues in 2010 – 2011 were more than £60 billion with a net profit of £2.67 billion (Tesco, 2011).
There are several firms in the food retail industry competing against each other based on price, products, promotions, and placement. However, among these four factors, price is the most dominant one.
Consumers in the food retail industry are very much attracted and targeted by firms in the industry based on cost and this is the reason why most firms in the industry including Tesco and Asda have used a Cost leadership strategy. This strategy has allowed firms to keep their overall costs low and thus offer the products at a lower price than the competing firms to the customers.
With improvements in technology, the industry has been able to improve its sales because e-retailing and e-retailing have provided several opportunities for the firms in the industry to grow and expand their business as well as improve their market share. Also, the response of consumers has been very positive towards e-retailing as shopping online is far more convenient, saves time and energy. Because online shopping allows consumers to easily compare prices of a product offered by different retailers therefore online shopping is more convenient for them in comparison to traditional shopping (Internet Retailer, 2010).
With the improvements in technology and growth of e-retailing, the firms in the food retail industry face different challenges and problems like the ability to make the most of online shopping, implementing secure eCommerce on their website so that customers are ready to give their information, ensuring delivery of products within the time and products are sold at lower prices.