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Supermarkets in United Kingdom - Essay Example

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[Instructor Name] Supermarkets in United Kingdom (UK) The supermarkets in United Kingdom (UK) are the market leaders in the retailing industry and they have been successful in attracting a lot of customers to their premises. In the past couple of years, the competition between the supermarkets has stiffened and according to Ball, it is expected that the retail industry will start consolidating at an extensive level…
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Supermarkets in United Kingdom

Download file to see previous pages... Although the supermarkets claim to provide a wide range of options for their shopping but the prices that they charge on their products and the pressure given to the suppliers has created certain predicaments in the market. The four giants in the UK supermarket are Tesco, Sainsbury’s, Asda and Morrison. In addition to the planning controls by the government for taking care of the pressures felt by the suppliers in the retail industry, it has restricted the expansion plans of the four giants in the market (Grugulis, Bozkurt and Clegg, 2). Despite the recession happening in the country and decrease in the consumer’s spending, the food and retail industries are showing exponential growth; the main credit goes to the four giants in the supermarket industry who are opening numerous stores at an accelerating rate (Neate, 1). The report by Corporate Commission has indicated that Tesco, Sainsbury’s, Asda and Morrison have been successful in getting permission from the concerned authorities to expand into other areas by opening up new stores. The report also highlighted the threat the expansion of these large supermarkets posed to the convenience stores, local grocery stores and specialty stores. The study of Clerren et al. revealed that the large supermarkets are doing expansion on such an increasing rate so that they can get more market share as compared to their competitors and it is expected that the trend will continue so because of the support that they are receiving by the UK government (470-471). Grocery Market of UK The IGD research has shown that in the past ten years, the grocery market of UK has been growing at an exponential rate and the number of large supermarkets has risen to an exceptionally high figure (Li, 2). In 2008, the grocery market had reached ?146.3bn from ?93.3bn in the year 1998. Afterwards, the market has seen numerous uncertainties in the form of less consumer spending power, high rate of unemployment, financial crisis and many more. As of 2008, the UK grocery store has been divided into four major sectors i.e. convenience store; hypermarket, superstore and supermarkets; online channel and traditional retail. Among all the sectors, the huge market is of hypermarket, superstore and supermarkets and these comprise of more than 73% of the entire sales of the grocery market, followed by convenience stores’ sector that has 21% of the total sales; however, traditional retail faces stiff competition from the aforementioned two sectors and it has declined to 5% (Michaels, 1). According to the Corporate Watch, the four biggest supermarket chains in the UK market comprise of Tesco, Sainsbury’s, Asda and Morrison and they collectively constitute of about 68% of the complete grocery market (3). Tescopoly has shown that the grocery market share can be distributed as the traditional retail stores and supermarket chains; the market share is divided as 30% of Tesco, 15% of Asda, 14% of Sainsbury’s, and Morrison of 10%. Other supermarket chains that are included in UK grocery market are Marks and Spence, Iceland, Waitrose, Whole Foods Market, Aldi, Lidl and many more (Vasquez-Nicholson, 3). Porter has reported that the disclosed sales figure of the four large supermarket chains in the last financial year are as follows, Tesco ?3.8billion, Asda ...Download file to see next pagesRead More
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