The Uk Supermarket Industry : An Oligopolistic Industry

Generally the concentration of competitors has been fragmented by geography. However, through recent consolidations, the emergence of regional and national chains has started to prevail along with the decline of the independent/local shops. This consolidation activity has allowed many companies to spread their fixed costs over a wider range of output, thus

The threat of entry of the supermarket industry in US is low, which base on the analysis of the three major sources that related to the entry barriers. The first barrier is the economies of scale of the existing large supermarkets. When these incumbents achieved larger volume sales, they can have lower unit costs than new entrants, and it will very difficult for those new entrants to compete with them (Johnson, Whittington, &Scholes 2011). For example, Wal-Mart had invested in innovative procurement, automated distribution centre and bar coding to increase its economies of scale, and these investments created a great barriers for new small retailers to enter into the supermarket industry (Porter 2008). The second barrier is the incumbency advantages, which mean the incumbents established their own strengths that cannot be used by competitors (Porter 2008). For example, the top ten supermarkets in US have accumulated extensive experiences on how to run their businesses more efficiently than new entrants (Johnson, Whittington, &Scholes 2011). The subtle differentiation between the products that sold in supermarkets is the third barrier for new entrants. Because most of the product assortment is same or similar between each supermarket,

Barriers will be placed on all new supermarkets entering the sector; this will be from the existing supermarkets. For example Tesco may have cornered the market for certain goods therefore has established a relationship with its supplier so that it will pay a lot less for large volumes of goods whereas the new supermarket will not be able to find cheap, reliable suppliers this gives Tesco's the advantage of economics of scale. A new, small supermarket chain can only buy a relatively small volume of goods, at a higher

The UK supermarket industry is a very competitive and profitable industry. It is made up of four main players with significant share of the market, and then various smaller companies who focus on smaller niches in the market such as the bottom of the market discounters and the top of the line speciality stores. It is an interesting market and this report evaluates the attractiveness of the industry using Porter’s five forces model with an insight into how market nicher Waitrose sustains a competitive advantage. Next this report looks at how major player Sainsbury’s successfully competes against its rivals using differentiation strategies, and analyses current consumer trends and problems can effect this industry.

In this article Michael Baker discusses the livelihood of small retailers in a market subjugated by the financially dominant oligopolies, Woolworths and Coles. While the small independent retailers in direct competition with Woolworths and Coles provide some competitive respite for consumers, as they encourage competitive pricing, albeit predatory pricing, it is clear that Woolworths and Coles control the supermarket industry in Australia, in the formation of a duopoly. It is evident that Woolworths and Coles engage in predatory pricing in an attempt to eliminate independent retailers from the market. This article discusses recent efforts made by the Australian government and the Australian Competition

The objective of this report is to analyse the UK supermarkets industry for John Lewis in order to seek their competitive advantage in the market. This report is to be presented to the Board of Directors of John Lewis Partnership.

Marion Nestle, a teacher at New York University, examines how supermarkets are designed and how the design affects consumers in her essay “The Supermarket: The Prime Estate”. “Nestle teaches in the department of nutrition, food studies, and public health” (496). The essay was published in one of her numerous books, What to Eat: An Aisle-by-Aisle Guide to Savvy Food Choices and Good Eating in 2006. Nestle investigates the strategic method behind the store’s layout in this essay for the average consumer. Nestle portrays the manipulations of supermarkets to sell the most products possible to consumers through the store’s order and design through logos, pathos, and cause and consequence in the development of her essay.

This report is about the UK supermarket industry, and analysing the condition of the current market. It will focus on its market structure, barriers to entry and contestable market to analyse if the supermarket industry is an oligopoly market and if it is a contestable market or not.

Anti-supermarket campaigners have a counterclaim that the big four abuse their dominant position in the marketplace and restrict

3.3. Bargaining power of buyers As the customer has the freedom of choosing any supermarket company to buy from and the power of switching their loyalty to any supermarket company without costing them anything, thus the bargaining power of buyers is considerably strong (Porter, 1980). Also as the products in each of the supermarket companies are nearly the same because there is no supermarket brand that have a completely different segment of products then the other UK supermarket companies. This gives the consumers in a positive privilege in the purchasing process. On the other hand, as a result of the global depressive economy that forces each UK supermarket company to fight in order to maintain its market share.

Since the income level is the predominant factor in a consumer society,  where do people mainly spend their money?  Studies show that in the U.K. every three out four pounds spent on food and groceries are at the four largest super market chains – Tesco, Sainsbury´s, Asda and Morrisons. Tesco alone accounts for one out of every three pounds (Bevan, 2006). How does this realilty affect  the  small business owner and the economy as a whole?  There are two sides of the matter regarding this power trick. On one hand, the sociologist Dennis Wrong (1997) describes the grant supermarket as a zero-sum power, which means there are only winners and losers in a game concept.  Due to the increasing growth of Tesco and Sainsbury´s local convenient store formats since 2000,  a very smart idea that uses its financial power to create market opportunity to meet today´s working peoples` fast life style and demand,  people are more likely to pass through these convient stores rather than shop in  the local grocery store, butchers, or fishmongers stores etc.   What this  means is thatthe expanding market and profit gain of the grant supermarkets, such as Tescos and Sainsbury´s, is at the cost of the closure of local small

The grocery retail industry worldwide has grown in recent years to become one of the most intensely competitive industries due to the continuous amounts of new entrants. A grocery retailer is one that sells food and other general household items. Hypermarkets, supermarkets, discounters and small grocery retailers are all under the grocery retail umbrella. Between 2003 and 2008, the grocery retailing industry accounted for 45% of store-based retail values sales over the world. The figures

There are 92,796 grocery stores in the UK and the market value increase by 19.5% in the last 5 years and according to IGD forecast the UK grocery market should reach £203bn by 2019. But what we can see in the figure 1 that from 2009 to 2014 annual grow in the grocery market start decreasing from 4.9% in 2009 to 2.8% in 2014. One of the reason for this is difficult economic conditions which had an effect for consumer spending. Consumers choose to spend less money on food by buying less food or by looking for cheaper places. Retail market is diversified into three main sectors: Hypermarket and superstores which accounts for 42.3% of retail market, convenience stores 21.4% and small supermarkets 20.3% (Figure 3). So about 84% of sales are done in these three sectors. The biggest 4 retail chains in UK are: Tesco which takes 28.7% market share, Asda has 17.3%, Sainsbury’s 16.6% and Morrison’s 11%. (Figure 2) So, if we will sum up 4 biggest retail market chains we will have about ¾ of market share. Finally, a strong characteristic of this sector is competition with price wars and a

2.0 PORTERS FIVE FORCES MODEL FOR UK SUPERMARKET INDUSTRY Supermarkets’ performance is reliant on consumer’s income and their willingness to spend. The growing consumer pressure to drive value, quality and taste requires companies with strong management teams to understand the market trends in the industry of which this had led to constant competition among firms in the industry. This rivalry is based on firms in the industry battling to win the highest market share in

Most of the businesses operate in competitive markets: businesses have to take on and see of rivals or competitors.ALDI, a