Supermarkets in UK - Literature review Example

?Literature Review Supermarket is one of the recent concepts in UK. Since supermarkets first developed, there have been enormous changes in the environment of the food sector as a whole. The literature review part is based on academic journals, articles, books and reports written on grocery supermarket retailers. The research is on the Super markets in UK. In this chapter, I have read academic journals that relate to this topic in the last 5 years. A literature review may form a one of the fundamental part of the research procedure or may constitute a research plan in itself. In the circumstance of a research paper or proposal the literature review is a significant synthesis of earlier research. The assessment of the literature guides reasonably to the research question. So that it is essential for the project. The first academic article that relates to my topic is UK Supermarket Space Race Faces Scrutiny by Andrea Felsted (2011). I choose this article to help offer more understanding with my first research question of what has happened to the retail grocery trade over the last five years, particularly to the large supermarket chains. “The main beneficiaries in the retail grocery sector of this drive to economies have been those large-scale supermarkets that have pushed everyday low prices, while some of the more basic bargain retailers have also seen benefits”1 The article Supermarkets – The New Drivers of Urban Growth (2011) published in the journal says that, Supermarkets have turned out to be one of the main players in shaping and building places. The author summaries in the article are that, retailers don’t desire to construct a supermarket these days. “While the economic downturn has impacted heavily upon most development, the major retailers have gone from strength to strength. Supermarkets are increasingly being built on prime sites in an urban setting, rather than out of town, and investment in the site goes well beyond building a big retail shed”2 Mintel (2011) in his book says that it was a very rough year in 2010 for grocery retailers, due to clients switching to extremely competitive discount food dealers, and that they paid more attention on wasting food. Tesco Plc is one of the UK based retail industry, and also the major business to function in the grocery chain. “Tesco, Britain's biggest retailer, has reported record profits of ?3.8bn – more than ?10m a day – but admitted that it needs to do better in its core UK operations”3 According to Alexandru M. Degeratu in his article called, Consumer Choice Behavior in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and other Search Attributes, says that, there is rising interest or attention in understanding the results of computer mediated shopping atmospheres. A subject of particular interest to equally academics and practitioners is in determining whether there are methodical dissimilarities in customer choice behavior among regular and online (offline) storerooms, and if there are dissimilarities, in understanding the causes for these differences. “Advertising induces brand loyalty in consumers who would otherwise purchase the cheapest alternative on the market.”4 According to Helen E Perriman in his article, THE IMPACT OF THE GLOBAL FINANCIAL CRISIS ON CONSUMER BEHAVIOUR, behavior of the consumer is influenced by both interior features and external features that characterize the atmosphere in which the person behavior takes place. (Helen E Perriman 2010). Andy Wood in his article called, Shopper behaviour as the UK Exits Recession, talks about consumer’s supermarket shopping behavior during recession. According to him, one of the most precious tools in every retail grocery market chaos is the programmes related to consumer loyalty. Whereas in the previous year, the market share of the Tesco dipped in the face of customers going down the bazaar looking for superior deals, so the marketplace leader has organized to turn various things around. (Andy Wood 2010). The major beneficiaries in the retail grocery area of this make to financial systems have been those important supermarkets that have pressed everyday low costs, whereas some of the extra essential bargain sellers have also seen advantages. At the other finish of the spectrum, certain premium players have also profited as they have effectively marketed own-label brands whereas supporting consumers to treat themselves to particular luxury food products to recompense for curtailed expenditure elsewhere. Among the various strategies taken by the company, one was to develop the business mainly in the UK. The company is headquartered in U.K. and they wish to develop their company primarily in U.K., It denotes they target also the rural inhabitants of U.K. more. (Tesco Plc, 2012). Sainsbury is also another UK based retail industry. The main strategy is offering extremely high quality food at a low price (Sainsbury Plc, 2012). According to Daryl A. Brehm in his article, United Kingdom Retail Foods2010, the retail grocery industry in UK is mainly concentrated with 8% of market share in the hands of leading five supermarket stores. “The UK grocery market was worth ?150.8 billion ($241.3 billion) for calendar year 2010. This is an increase of 3.1 percent over 2009. Groceries account for 12.8 percent of total household spending in the UK, making it the third largest area of expenditure, following housing and transport. Food and grocery expenditures account for 53p in every ?1.00 of retail spending (excluding restaurants). 21p in every ?1.00 spent on food and grocery is spent in convenience stores”5 In this article he says that, five major supermarket outlets dominate in UK food retailing industry. These five supermarkets account for around 83 % of the market. Tesco is the market leader of the food retailing industry with 30.6 %share, followed by Wal-Mart industry by way of 17.2%, Sainsbury’s with 16.2 %, Morrison has 11.7, and Cooperative sector rounds out the quintet by 6.8%. The other supermarket chains in UK are Iceland, Lidl, Waitrose, and Aldi. “The top supermarkets were involved in a price war over the festive period, initiated by Tesco's ?500m Big Drop Price campaign, which was launched in early October. But the company later admitted that its spending on the campaign had not been successful. Meanwhile, low-cost chains also saw their share of the market grow, with Aldi up from 3.1% to 3.5% and Lidl up from 2.4% to 2.5%”6 Graeme Wearden in his article talks about the Tesco and which is reported to have one of the weak sales developments during Christmas in 2009, since the financial recession in 2008. In addition, the article talks in relation to that Tesco is planning to employ around, 000 employees in the fiscal year 2009. The article goes further regarding why Tesco is carrying out to employ persons which are due to the rising joblessness. (Graeme Wearden 2009). The article ‘Tesco Bucking Slower Sales Trend’ says that the supermarket saw third quarter sales which eliminate new stores at its UK stores increase about 4.8%, from 2.7% in the beginning of 2007. Other leisure firms and retailers have stated slowing sales in current days. “The rising cost of basic foodstuffs has prompted some retailers and fast food chains, including Domino's Pizzas, to increase their prices. Total sales over the period - including from its international business - rose 11.8% - up from the 9.2% increase seen in the first half”7 Nick Mathiason (2008) in his article ‘Tesco posts worst figures in 16 years’ says that UK's main vendor has been fighting the incorrect war, as it rebrands itself as the country's largest discounter' in a fight to keep its main market share. It has also been struck by troubles increasing abroad. Tesco has been cutting costs to attract consumers hit by surging unemployment and plunging house costs. Other than this, has struck its sales margin. “The group, which employs about 440,000 people in almost 4,000 stores across 14 countries, said this month that underlying sales in its second-biggest market, South Korea, had fallen and that it was slowing down its expansion in the United States because of the economic downturn”8 An article in the BBC News Business (31 January 2012) states that the starting of the 2012 Tesco’s grocery market reduced by about 30%, which is the shortest form in seven years whereas its 2011’s market share was about 30.5% . In 2012, its market share was 29.9%. Tesco’s charismatic sales were unacceptable, as their trading fell by about 2.3%. In addition Morrison’s shares dropped from about12.4% in the year 2011 to 12.3% in the year 2012. On the other hand, the article also wrote that Sainsbury’s shares increased unlike that of Tesco, with its market share rising from 16.6% in the year 2011 to 16.7% in 2012, which is its most excellent performance in nearly a decade. “The top supermarkets were involved in a price war over the festive period, started by Tesco's ?500m Big Drop Price campaign which launched in early October. But the company later admitted that its spending on the campaign had not been successful”9 Rebecca Smithers (17 November 2011) in his article ‘Supermarkets 'Confuse' Consumers with Product Pricing’ states that supermarkets’ incompatible use of "unit prices" on drink and foods are confusing. Cash-strapped customers prevent them from working out. Retailers are necessitated by law to demonstrate both a unit price and a selling price on the shelf labels of drink and food products. The can be used are particular in legislation, and contains a kilogram, 10g, 100g, liter, 100ml. BBC news (2007) reported that Tesco in the year 2007(before the recession) was growing to 4.8%, up from about 2.7%. The increasing cost of essential foodstuffs has encouraged some dealers and fast food chains, as well as Domino's Pizzas, to raise their prices. “Total sales over the period - including from its international business - rose to 11.8% - up from the 9.2% increase seen in the first half”10 Julia Finch, and Zoe Wood in his article ‘Big Four Supermarkets Tough it Out in Battle of the British Aisles’ says that supermarkets have mainly three ways of increasing their income from selling more goods, from higher prices.Sean Poulter (22 September 2011) in Mail Online talks about the price war that major supermarkets in UK are engaged in, due to the new strategic approach of Tesco to win consumers. Tesco triggered an authentic supermarket price war on the cost of living, which was for the first time after 1920s. A bloody fight is forecasted with Morrison’s, Asda and Sainsbury’s, and even with as the flourishing budget chains Lidl and Aldi. “The average family is still spending less than before the recession, with each British household cutting back on ?35 a week on average, data published by the Office for National Statistics have indicated”11 The retail giant has misplaced market share in current months, suffering particularly from Asda’s promise of price to be 10 % cheaper on a basket of various groceries items. The Tesco go would force Asda, which is division of the world’s largest chain, U.S. industry Wal-Mart, to cut prices or rip up its cost promise. An industry insider says that Tesco will short store managers regarding the new campaign more than the next few days. Charles E. Dennis, Tino Fenech, and Bill Merrilees in his book called E-retailing says that Tesco is the largest e-grocery and is UK’s number one by a substantial margin, with 53 % share of the largest grocery market. It divided twofold. Firstly, Tesco had first mover benefit, rapidly developing its process to 95% of the population. Second, the primary operation employed pickers to select the commodities from the shelves of local stores. In the article ‘Consumers Spending Less on food and More on Clothes’ the largest areas that households have reduced is on drink and food at supermarket, and shopping out in a cafe, pub. The ONS states that the average household expenses is about ?6.40 lesser on food and drink a week, contrasted with the year 2007. They are also spending ?3.20 lesser on eating out at restaurants. Following are the graphical; representation of UK supermarket.12 • Theoretical framework Scientific Management (Frederick Taylor): Scientific Management tries to raise productivity by rising competence and wages of the employees. It finds out the greatest technique for performing all jobs. It selects workers by using Scientific Selection Processes. It gives Scientific Preparation and growth to the workers. It considers in having a close co-operation among employees and management. It uses Division of Labour. It attempts to create utmost production by fixing Performance Standards for all work and by having a Differential Piece-Rate method for payment of wages. Administrative Management (Henry Fayol): The "14 Principles of Management" have been an important effect on modern management theory. His sensible list of values assisted early 20th century directors learn how to manage and interrelate with their workers in a productive way. Even though the principles aren't broadly used today, they can still offer direction for today's managers. Several of the values are now measured to be general sense, other than at the time they were revolutionary ideas for organization. Product life cycle methods infrequently yield other services in addition to the useful unit. The 4Ps model is just one of a lot of marketing mix lists that have been developed above the years. And, even as the problems have listed more than are important, they are now a subset of the described probing that can be necessary to optimize the marketing mix. Contingency Theory demonstrates the connection among the leader’s style and group performance under opposed situational circumstances. Conclusion: From the above described literature review, it can be said, for increasing competitive benefits, the companies require to attract consumers, and should uphold customer relationship for creating a loyal consumer base. From the performance of the UK based super market business, it can be concluded that Tesco Plc has performed the best in the financial turmoil. However, the other super markets also performed well. Sainsbury and Morrison generally focus on the grocery segment, when Tesco has given attention to the non food sector, along with the food division. Over the last five years supermarket concept was changed dramatically. Above literature shows that in recent years there has been both development and consolidation of the worldwide supermarket sector. Tesco, Sainsbury and Morrison have tried to position themselves in order to continue their market dominance by way using various innovative strategies. As Tesco offers quality goods to the customers, the purchasers then turn out to be more reliable to the retailer. Sainsbury’s has enlarged its marketplace share in an increasingly challenging financial atmosphere, even as delivering its development strategy and maintaining the power of its balance sheet. Also investing in the long-term enlargement of the business and obtaining benefit of market circumstances to produce funds from the sale. Morrison strategy to maintain the dominance of market is to convey sustainable long term development, building on our customary strengths of fresh items of food, service and value, backed by our exclusive vertical integration ability, at the same time as reflecting consumer’s requirements and the alteration that are taking place in the market. From the literature reviewed we can say that the following subjects have incurred through the last five years. There was recession in 2008 that had huge impact on big grocery supermarket In 2009 the recession finished and large supermarkets happening to reposition themselves to gain more consumers. Consumer behaviour altered towards big supermarket chains. Large grocery supermarkets happening a price war with each other. Big chain supermarket grocery income/revenues weren’t steady over the last five years. In 2010 customers switch to competitive reduction food retailer. In 2011 supermarkets underway a price war with each other. Customers buying behaviour has alterations since the recession. Critique of the Literature Review: A review of literature (books, journals, etc) is an evaluative statement of information establish in the literature connected to study. The review helps to explain, sum up, assess and clarify this literature. It should provide a theoretical base for the study and assist to determine the environment of research. Strength: When a traditional review of literature is thoroughly carried out by a specialist in the field, perceptive, valid synthesis of the study literature can be build up and sometimes exclusive insight is created. Weakness: The traditional review of literature method leave s writers susceptible to intentional and unintentional bias in the selection, explanation and association of content. Additionally, it is hard for the statistical power of experiential studies to be measured in understanding many studies.  As a consequence traditional critics regularly highlight the statistical implication results, rather than the outcome sizes.  In fields with study that has low power; traditional review of literature may be compromised by this potentially grave issue. Secondary data collection through the literature review is the research method used for this study is to collect information regarding the UK supermarket. Recommendations for Future Study: 1. Study how feedback functions in a wider diversity of learning domains. 2. Examine individual learner approaches and motivations and recommend feedback based on issue for example self-efficacy, tenacity, attributions, expectation, and aim structure. 3. Recognize quantifiable variables that can reproduce internal cognitive and affective procedures of learners that may potentially influence how feedback is utilized and perceived. 4. Study how feedback functions in constructivist learning atmosphere and test latest feedback policies in these environments. 5. Study the position of examining and how both internal and external feedback generation influences the learning from a perspective of self-regulation. 6. As technologies carry on to advance, plan feedback that utilizes the superior capabilities for teaching. 7. Continue to recognize and check interactive patterns among the leaner, atmosphere, person internal knowledge building, and varying kinds of feedback Bibliography Brehm, Daryl A & Vasquez-Nicholson, Julie, Retail Foods, Global Agricultural Information Network, 2010, retrieved April 09, 2012, http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_London_United%20Kingdom_2-3-2011.pdf Chioveanu, Ioana, Advertising, Brand Loyalty and Pricing, Print, 2007, retrieved April 11, 2012, http://else.econ.ucl.ac.uk/papers/uploaded/323.pdf Consumes Spending Less on Food and More on Clothes, The Telegraph, 2012, retrieved April 09, 2012, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9095970/Consumers-spending-less-on-food-and-more-on-clothes.html Shopper Behaviour as the UK Exits Recession, Talking Retail, 2010, retrieved April 09, 2012, http://www.talkingretail.com/blogs/talking-points/shopper-behaviour-as-the-uk-exits-recession Supermarkets – The New Drivers of Urban Growth, The National Archives, 2010, retrieved April 09, 2012, http://webarchive.nationalarchives.gov.uk/20110118095356/http:/www.cabe.org.uk/articles/supermarkets Tesco Market Share Dips Below 30%, BBC News, 2012, retrieved April 09, 2012, http://www.bbc.co.uk/news/business-16817254 Tesco Posts Worst Figures in 16 Years, The Guardian, 2008, retrieved April 09, 2012, http://www.guardian.co.uk/business/2008/nov/30/tesco-retail-supermarkets-business-recession Tesco Reports Record Profits of ?3.8bn, The Guardian, 2011, retrieved April 09, 2012, http://www.guardian.co.uk/business/2011/apr/19/tesco-reports-record-profits Tesco Bucking Slower Sales Trend, BBC News, 2007, retrieved April 09, 2012, http://news.bbc.co.uk/2/hi/business/7126246.stm UK Grocery Retailing, The Food and Grocery Experts, 2010, retrieved April 09, 2012, http://www.igd.com/index.asp?id=1&fid=1&sid=7&tid=26&cid=94 Read More