Outline the View That Big Supermarkets Both Provide and Limit Choice

• The average grocery store has 47,000 products which makes it look like there is a large variety of choice – but it is an illusion – there are only a few major companies and a few major crops involved

Operating on very thin profit margins, players in the supermarket industry traditionally either focus on a premium segment or follow a discounter strategy at the low end. Premium players address educated and more price elastic consumers who value healthy, natural and organic food; the share of perishable items for these players is normally distinctly higher. Players that focus on a discounter strategy offer a higher share of simple necessity items and value price competitiveness over premium features like healthiness or organic origin. Independently of the focused customer group it is imperative for players in the supermarket industry to be cost efficient and optimize operations

ustralian groceries market was very fragmented during the 19th century and was typically solely operated, region specific and served a very small community. Improvements came about in the 20th century with the development of supermarkets which provided one stop shop for its customers (Deloitte, 2012). The supermarket and grocery sector is a major contributor to the retail turnover of Australia, (Alexander) with revenues in excess of A $ 80 Billion in 2013-2014 contributing to a little over 7% of the economy while the grocery industry alone contributes approximate 20% of that of the supermarket and the grocery sector. The industry also employs well over 280,000 people (Tonkin, 2014).

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.

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

The Australian Supermarket Industry is the very hot topic that’s why very interesting topic now days. The Australian supermarket and grocery stores have a very severe competition in Australia mainly because of organizations competing in this mature industry are going towards cost reduction initiatives with competing advantage rather than product differentiation strategies, In other words business in this industry increase market share by charging lower prices while making reasonably fair profit. The growing popularity of ALDI – German based company of introducing its own label goods (products manufactured and sold under the retailers own brand) with low cost has forced the two giants –Woolworths and Coles to cut price

     The main substitute to buying your food from a grocer is going out to eat. A 2002 Gallop poll shows that Americans eating more meals outside of the home than ever before. When examining today’s changing supermarket consumer in Progressive Grocer, Buck Jones made this observation: “To get the total picture we need to look outside the supermarket arena at how customers are using other retail outlets to satisfy the needs that we could be addressing.” The success

The UK supermarket industry resembles an oligopolistic industry, with several characteristics. Oligopolistic markets tend to be characterised by high concentration ratios, barriers to entry and…Since the turn of the century, the industry has been scrutinised by both the Office of Fair Trading and has been referred to the Competition Commission on two occasions. (Seely, 2012)

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

* External Context of Sainsbury’s belongs to the biggest supermarket leaders in UK. In other words, Sainsbury’s is part of big four ‘Asda, Tesco, Sainsbury’s, Morrison’s. The biggest rival today in UK market is Morrison’s, they booth fighting for a market but Sainsbury’s ram in a higher place. In Appendix 3, we can find concept of retail and types of functioning.

Nowadays we could easily find minimarkets in Surabaya. As we can see, in one area we can find 4-5 minimarkets. We are walking 100m and then we will find Indomaret, walk again slightly we will find Alfamart and others minimarkets. According to Businesstempo.com Government of Surabaya has saved 667 name of minimarkets in Surabaya. The details are 234 Alfamart, 293 Indomart, 3 AlfaXpress, 9 Rajawalimart, 7 Superindo, 42 Alfamidi, 15 Circle K, and 64 others. So many minimarkets near from our house appear due to increasing community needs. Not only primary needs like rice, shampoo, soaps and foods, but also we can find in Minimarket nowadays to fulfill our secondary needs like refil the phone credits, top up E-toll card, pay the electricity bills and even in Minimarkets we can buy ticket for plane, trains, bus or travel. In addition, products in minimarkets are more complete, we can find so many various items in there so that many people support the existence of many minimarket. The number of minimarkets also bring good economic effects

The supermarket wars has been increasingly frustrating for consumers as sometimes consumers tend not to know where to get the best deals, as they all advertise the same price and brands, in the UK companies such as Tesco and Asda advertise and sell the same products but also claim to low on prices for the customer satisfaction, but in fact they charge more when it comes to their own brands, looking in the telecommunication sector is clear that with the privatization of the telecommunications industry, the mobile phone industry experiences transformations that enhance the dynamics of competition.

Consumers generally benefits from increased competition in retailing industries as well as large supermarket chains. It is worth thinking that what benefits shoppers gain and why it is happening. Due to fierce competition among retailing, such as Wal-Marts, Tesco, Carrefour, etc., they innovate internal management and operational modal by grasping the variation of demand. In previous research, Sorescu et.al (2011) mention that innovation challenges confronted by supermarkets is customer-centric. In the sense, they improve retailing processes and design products to better satisfy people’s needs. Meanwhile, Seth et.al (2005:123) show that modern markets gain profits by offering free car parking and one-stop shopping. Economically,

In this essay I am looking at Kashmir Watan food store; a food store specialising in Asian and continental groceries where I have worked for 6 years. It is basically a retail business falling in the private sector. It is estimated that UK’s grocery market accounts for approximately £175 billion according to the statistics of April 2014. The global food and consumer goods experts (IGD) forecast suggest that the grocery market by 2019 will be worth £203 billion. It thus becomes logical that the different channels within the grocery