ECONOMICS

Analyzing Supermarkets Chain in the United Kingdom of the last 5 years



Analyzing Supermarkets Chain in the United Kingdom of the last 5 years

A brief look at UK's Grocery Market

A research was conducted by the institute of grocery development based on the last decade. The research concluded that the grocery market has shown an increasing trend. According to research, in totality the grocery market has grown from £93.3 billion in the year of 1998 to £146.3 billion in the year of 2008. It is very recent that the Grocery market has come across uncertainties in terms of financial instability, higher unemployment rate and constricted budgets of households along with many more. Despite the uncertainties faced, the grocery market has been able to overcome the barriers and has exhibited growth.

According to the survey, in the year of 2008 the market was valued at £146.3billion which is termed as an increase of a total of 4.8% in 2007. The Food, as well as the grocery expense, accounts for a total of 52p in every pound of retail oriented spending. From every £1 spent, 21p has been spent on food & grocery in the convenience stores (www.igd.com).

In totality, 92,796 grocery stores exist in the United Kingdom which in turn can be divided in to 4 main sectors. The 4 main sectors are Convenience, Traditional, Hypermarket, supermarkets, superstore and the online channel.

The largest amidst all are the superstores, the supermarkets along with the hypermarkets. They account for 73 percent of the entire grocery sales. Convenience store is termed as a sector that is the largest and accounts for 21 percent of the entire grocery sales. However, the traditional oriented retail has come across barbarous competition from the superstores and the super markets. The market share of the convenience has decreased from 5 percent. On the other hand, the online channel has futile market share that exists.

United Kingdom has 4 famous chains which are Morrison's. ASDA, Tesco along with Sainsbury. They have a total of 67.9 percent of the total grocery sector. Tesco is at 28 percent of the market share, ASDA is at 15.2 percent, Morrison's is at 10.4 percent and Sainsbury at 14.3 percent.

It is after Cooperative pursuing of Somerfield that it gained a total market share of 8 percent. Somerfield has 2.7 percent and Cooperative had 6.3 percent before the purchase. The other supermarkets existing in United Kingdom are Iceland, Waitrose along with M&S.

According to the Neilson's research, United Kingdom has private label existing in the markets which is worth $100 billion. In terms of market of the grocery, private-oriented labels have covered 55 percent of the market share in the year of 2008. Majority of the chains of supermarket have private label existing. The private labels are not the copies of the products that are branded. They are a vital tool to branch out the product width and depth as well as create revenue-oriented stream. Powerful private labels are there because retail-oriented oligopoly exists in the ...