Driven by a consumer that is undergoing a demographic and lifestyle evolution, retailers in every sector are having to adapt in order to both survive and thrive.

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The proposed merger between Sainsbury and Asda is openly admitted by management as being a defensive move in the light of increasing competition in the UK, and retail consolidation — the rationale being that if they do not consolidate then someone else will make a move that would leave both in a weaker position. The capacity to gain and retain market share is important. The ultimate state of efficiency is commoditisation — everyone gets the same products, from similar, faceless, efficient outlets at a bargain basement price. Aldi and Lidl could take some stores too, but many of them are larger than their typical desired footprint.

30/04/ · Market sector: Retail and wholesale. Outcome: Markets - phase 2 adverse effect on competition leading to remedies. Opened: 9 May Closed: 30 April

Groceries market investigation (CC) - GOV.UK

30/04/2008 · Market sector: Retail and wholesale. Outcome: Markets - phase 2 adverse effect on competition leading to remedies. Opened: 9 May 2006. Closed: 30 April 2008.

Porter’s five forces analysis of the UK ... - How And What

01/01/2020 · Competition is extremely intense in the UK supermarket industry. Therefore, it is a less profitable industry for existing companies. While Tesco is the market leader, the competition between Asda and Sainsbury’s for the 2 nd position is fierce (Kantar, 2020). Likewise, price wars launched by Aldi and Lidl are also squeezing everyone else’s ...

30/04/ · Market sector: Retail and wholesale. Outcome: Markets - phase 2 adverse effect on competition leading to remedies. Opened: 9 May Closed: 30 April

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From: Competition and Markets Authority Published 30 April Case type: Markets Case state: Closed Market sector: Retail and wholesale Outcome: Markets - phase 2 adverse effect on competition leading to remedies Opened: 9 May Closed: 30 April Brexit and the negotiations currently being undertaken by the UK Government and the EU will certainly effect how the grocery sector operates.

The RTT discussed at length the varying scenarios, negatives and opportunities for the supermarkets, but Brexit is a moveable beast, and it will be years before the dust has settled and its true impact can be assessed. The trade deals that are signed, and the details within those agreements have the potential to require grocers to completely overhaul their supply chains. The natural direction to take would be to look closer to home, however the UK food manufacturing sector would require sizeable expansion in both farming and production in order to even come close to fulfilling demand.

Undoubtedly, UK grocers are undergoing a step-change in nearly every aspect of their businesses. Their customers are shifting, technology is evolving, new competitors are entering the market and of course, there is Brexit.

The future of the sector is one where supermarkets ensure they understand their new generation of customers, following the path of the non-food sector with experiential instore experiences, true multichannel shopping and of course, great value. Consolidation and diversification has come about for many retailers as a defensive move, whether that be against Amazon, Brexit, the changing desires of consumers or the rising fortunes of the discounters.

The RTT stated that those operating in the grocery sector that can quickly tap into the unique benefits that consolidation brings, whether that is with lower prices, wider product range or better margins, will be the ones to succeed and drive consumers to the tills.

From a macro point of view Brexit is the biggest threat right now. If not, all UK-EU trade could be faced with a hard border and customs checks from next April. Dover is the main UK port with 2. If all lorries going to the EU were to be subject to checks — currently there are none — then the British Freight Transport Association has suggested it would create a 29 mile queue along the M20 even if those checks took just 2 minutes per lorry.

There would also be huge queues at Calais with the port operator fearing 30 mile queues in northern France. Antwerp and Rotterdam also fear higher congestion at their container depots. We may also see the supply of labour weaken with fewer EU workers available to staff warehouses and shops while there is already the prospect of fewer lorry drivers issues relating to free movement of labour across borders, licenses being recognised and also retirement — the industry has a large wave set for retirement with few young people attracted to the industry.

As such, grocers are increasingly looking for British grown produce, but this will be challenging. This suggests profits could be heavily squeezed unless the British government and the EU can come to an agreement to prevent border checks happening. Much is made by the company execs about the benefits to consumers from such deals.

But is this really such a tasty carrot for the British shopper? Indeed 3 of the top 5 factors related to product assortment. Lowering prices is not that important to the majority of consumers. Why should this be so different to the new imperatives for supermarkets? In the annual Which? In my quest for an answer I went to visit the supermarkets in my local market town this week. In contrast the premium supermarket delivered not just a pleasant and fulfilling experience, but the theatre of fresh sushi-making, the opportunity to partake in yoga in the community room and an invitation to book up for a lifestyle coaching and health check session.

The UK Retail sector has been a tale of two halves for some time now — grocery has been performing well and non-food has been the contrary, especially when looking at retailers predominantly focused on physical stores.

This is happening due to increased competition within the sector alongside rising costs resulting in decreased margins. The value channel continues to represent the fastest growing channel in the UK. Even though the rate of growth is predicted to slow over the next couple of years from This would mean taking share from the multiples and it remains unclear if these have fully developed their defensive strategies apart from price reductions.

The Tesco — Carrefour buying alliance announced in early July could be the re- launch of a new business model for the sector. Even though the idea of buying groups is not new and a number of these entities such as Coopernic and AMS have existed for many years. These organisations have pre-dominantly been focussed on bulk buying for commodity categories instead of strategic alliances. The verdict is out to see if this partnership will be different.

If strategic partnerships similar to the aviation industries networks like One World or Star Alliance could be replicated, this could represent a sizeable opportunity for the grocery sector.

The proposed merger between Sainsbury and Asda is openly admitted by management as being a defensive move in the light of increasing competition in the UK, and retail consolidation — the rationale being that if they do not consolidate then someone else will make a move that would leave both in a weaker position.

The winners taking share have been the expanding discounters, the convenience format, and the premium end of the market, and the losers have been the big four, Tesco, Sainsbury, Asda and Morrisons. And of course there is now the looming threat of Amazon which is moving seriously into food retail having made such strong inroads into non-food.

Changing consumer attitudes and the expansion of the discounters have acted catalysts in the market. Apart from losing share the constant focus on price competition, combined with increasing operating costs, have led to operating margins across the sector falling from a median of 3.

But once Sainsbury and Asda have merged and inevitably transferred some stores to competitors, what can they do next to grow the two separate, and differently positioned, businesses? Com which, like Alibaba and its grocery arm Hema, is using its technological expertise in online shopping to understand how consumers shop in the physical world in order to design a fully integrated retail platform.

It is clear that the impacts are felt by local producers and wholesalers. Overseas producers in developing countries are also affected. Food production and flower in countries such as Kenya bring positive and negative externalities. Positive externalities include employment and export revenues. Negative externalities extend to deforestation, nutrient depletion and soil erosion. Of growing concern to environmental pressure groups is the impact that transporting food long distances is having on the environment.

Food shipment is seen as an important and growing contributor to global warming. The shipment of goods within the UK to processing and regional distribution centres is exacerbating the problem. Goods are being shipped long distances only to be sold within a few miles of where they were produced.

Supermarkets do not have to internalise the negative externalities of food shipment and trans-shipment. For supermarkets shipping an apple four thousand miles makes perfect economic sense. Food packaging helps to protect food and make appealing to customers but the environmental cost production and disposal is significant.

The food retail market is extremely competitive. Nonetheless, innovation, reputation and relationships are an important starting point for investigation and revision.

Supermarkets have sought to innovate by expanding the size of store formats and increasing the range of products offered. They have also sought to move away from just offering food and have moved into clothing, electrical and financial services. Firms within the food retail sector have worked hard to build reputation.

For some stores reputation can become a millstone. Kwiksave, the mid-priced retailer, fell foul of consumers benefiting from rising disposable incomes who wanted a few frills with their foods. Relationships are an important aspect of the food retail market. Supermarkets seek to build relationships with a range of stakeholders.

Relationships with staff are an important part of ensuring customer service. Motivation theory can be applied to an examination of the relationship between supermarkets and employees. Commonsense answers will not be good enough to ensure a high grade. Pay and conditions are factors which will affect the quality of staff recruited and the quality of customer service offered.

The decision by Tesco to cut sickness benefit paid to staff could have unforeseen consequences and may not necessarily improve customer service or, customers shopping experience. Staff training and effective customer service can increase productivity and add value. The supermarket sector is an oligopoly. The four firm concentration ratio is often used in order to define an oligopoly.

An oligopoly is said to exist when the four firm concentration ratio is above 0. An oligopoly occurs when a market is dominated by a small number of sellers. This does not mean that there are only a few large retailers. In fact there are a large number of retailers in the UK food market, just that a few large firms are able to exercise control over the market.

As there are only a few large retailers, each oligopolist is aware of the actions of the others in the market. Oligopolistic markets such as the food retail sector are interactive. The decisions of one retailer influences, and is influenced by, the decisions of another retailer. The strategic decisions of the leading supermarkets will take into account the likely responses of other market participants.

Safeways for example, knew that competitors would seek to follow suit if they used price promotions. In order to prevent this they delayed sending out mailshots detailing price promotions until the end of the week.

By doing this they knew that their leading rivals would be unable to get stock delivered in store to match demand for the promotion items and that customers of rival stores would be disappointed, even though their competitors gave a price match promise.

Interdependence between firms in an oligopolistic market, means the food retailers must take into account the likely reactions of other firms in the food market when making pricing and investment decisions. This creates uncertainty. Candidates may choose to use game theory in order to model this. Firms within an oligopoly produce or supply branded products and services.

Advertising, marketing and promotion is an important feature of competition in this type of market. Barriers to entry do exist in an oligopolistic market and this needs to be considered when examining the food retail market. Barriers to entry may enable firms in the market to make abnormal profits in the long run.

Brutal competition batters supermarkets the world over ...

04/10/2014 · With two German discounters muscling into the market and a growing aversion to megastores, the French retail industry bears some similarity to the UK's. As here, the French grocery sector is ...

30/09/ · Burt S & Sparks L () Power and Competition in the UK Retail Grocery Market. British Journal of 14 (3), pp. cooldevice.eu Abstract The UK retail grocery market is widely recognized as being oligopolistic. This has raised concerns over the level and use of power by the leading cooldevice.eu: Buyer power in supermarket sector can act to force prices down, ask for higher quality products and services and play competitors against each other. The customer bargaining power to supermarkets seems to be low. As if all the supermarkets charge for same high prices on certain products, the only thing that the customers can do is to accept it. 04/10/ · With two German discounters muscling into the market and a growing aversion to megastores, the French retail industry bears some similarity to the UK's. As here, the French grocery sector is.

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