Performance of UKs Retail Sector during the Global Financial Crisis - Research Proposal Example

Research proposal to Identify to Identify and Analyze Performance of UK’s Retail Sector during the Global financial Crisis Institution Date Table of Contents Research proposal to Identify to Identify and Analyze Performance of UK’s Retail Sector during the Global financial Crisis 1 Name 1 Table of Contents 2 INTRODUCTION 3 RESEARCH STATEMENT 4 AIMS AND OBJECTIVES 4 LITERATURE REVIEW 5 METHODOLOGY 8 RESEARCH PLAN 9 References 10 INTRODUCTION The financial crisis that the world has experienced during the last decade had severely adverse impact on several, if not all, countries across the globe. The financial markets of most of these countries are still trying to recover from this damage. Their survival in such times was often due to the governments’ efforts to assist their financial markets through the melt down. For example, the retail sector in the British economy is a large contributor to the GDP, and thus holds high significance in the economy. As a result, it receives special protective measures from the UK government, who provides it in the knowledge any slowdown in the retail sector would have devastating impact on the GDP of the country (HM Treasury, pp. 23-25, 2009). This participation of the government in UK’s retail sector is evident from its ranking of fourth in the global trade market, even though it accounts for barely 1% of the world’s population (HM Treasury, pp. 59-63, 2010). This shows that the government has good reason to protect the UK’s retail sector, considering the enormous potential it has. An example of this potential is British Petroleum, a prominent part of the UK’s retail sector. It is ranked second in the European continent, and apart from this, it is also the biggest industrial incorporation of the entire country. UK’s retail sector also draws pride from mechanical engineering and manufactured goods, both of which have a major role to play in the exports market (Hiles, pp. 39-46, 2010). Brokerage firms and banking institutions of the UK are also a prominent part, as it is because of them that the UK has succeeded in fulfilling one tenth of the world’s needs. Due to this strengthening of the economy, it is necessary to study the retail sector of the UK to understand the reason for its high accomplishments (Kolb, pp. 44-49, 2010). RESEARCH STATEMENT Highlighting this aspect, the research statement of the proposed research is: “To identify and explore the UK’s retail sector and its performance during the financial crisis, while also keeping in view, the government’s efforts to sustain the accomplishments of this sector.” AIMS AND OBJECTIVES The main aims and objectives of a research play a significant role in ensuring the success of gathering and analyzing information during the research process, as they provide the basis and a direction to the research, while avoiding wastage of time and resources. The researcher has given them high priority in the proposal, and plans full efforts to accomplish these goals. Primary research in the UK retail sector will be the main type of research that the researcher plans. Through it, they will search for the key factors responsible for this sector’s success, which they will later analyze in detail. Thus, the researcher will treat the global financial crisis as the peak point of the research, and will observe the retail sector’s performance during this period. Specifically, the researcher will seek the actions of the government which served as protective measures for this sector during the crisis. Thus the main objective is to recognize the beneficial role of the government as well as the aid it gives to the survival of the retail sector. Also, it aims to recognize any pitfalls and their solutions, which could help other governments to protect their own retail sectors. Key Aims and Objectives The research will seek to: To identify and analyze performance of UK’s retail sector during the global financial crisis Analyze basic trends in the UK retail sector Establish effect of the current financial crisis on UK retail sector Discuss the major challenges facing the UK retail sector as a result of the financial crisis. LITERATURE REVIEW The literature review focuses on the retail industries in the UK, especially the segmentation in this sector, as well as how the financial crisis affected it. Stakeholders such as the government, customers and dealers often play notable roles in any negative turn the UK’s economy takes (Lynn, p. 65, 2010). Basic Trends in Retail Sector of the UK Lower Consumer Confidence: Research shows that when the economic aspects of the country were steady and reliable, the consumer confidence was at its highest level. This was before 2007, when employment levels and positive externalities prevailed in the economy. From September 2007, the decline in confidence was apparent after the economic decline occasioned by both a decrease in consumer spending and a smaller number of borrowing options being available to them. Employment and Structural downsizing. The economic slowdown that caused the financial crisis had an extensively negative impact on the financial cycle, and even the level of employment due to decreasing sales. The UK government announced plans to lay off 200 workers, whereas Tesco planned to terminate the employment of 5000 of its workers. Flat Retail Employment. The retail sector recruited around 236000 employees between the years 1999 and 2003; and retail employment had reached a little over 3 million by the summer of 2003 (Macneil & O’Brien, p. 88, 2010). However, between 2004 and 2007, they started exhibiting negative results, with stagnant employment of three million employees, till 2008 (Macneil & O’Brien, p. 88, 2010). Effect of Financial Crisis on UK Retail Sector Groceries and related consumables make the most significant part of the retail sector. They have seen a lot of advancement due to high-end segmentation and safety rations. The retailers kept increasing the prices of these goods because of their claims of high quality. This made these very goods suffer the most once this segment was affected by negative externalities. The major industries in this sector face several challenges in keeping their sales constant during such devastating crises. As a result, they seek to advance their standards for providing credit to consumers, which largely affects the consumer activities. Since the supplies of some significant products have become unpredictable, price and credit are the new variables that the producers have to manipulate in order to score sales. Experts suggest that the government should relax its strict policy on credit to avoid a total downfall in this sector due to the financial crisis (Cable, p. 76, 2010). Major Challenges in UK Retail Industry Resulting from the Financial Crisis Lack of Expert Human Resources: Due to the fact that employment levels within the UK was initially very high, the availability of expert workers for high was limited. Around 40% of the companies in London agreed to this lack of skilled labor for the existing jobs available. The decline may have made the labor market situations simpler, but experts predict a long period of waiting before the UK is able to match the demand for these skilled workers (Lynn, p. 108, 2010). Financial Slump and Joblessness: The decrease in consumer confidence is a product of the financial meltdown, the lack of skilled human resources as well as the condition of the poor housing market (HM Treasury, pp. 39-47, 2010). Customers have decreased their spending and increased saving while others are either investing or paying back loans. As such, plans and policies designed to attract the customer will only add to the negative results in existence. Price Wars in the UK Retail Market: The smaller firms in the market were excluded from participation when the UK decreased the value added tax, as it led to price wars between the larger, key retailers. This is because the smaller firms could not match the cut rates, whereas the larger retailers such as Asda, Tesco and Sainsbury benefited from the tax cut by being able to reduce prices, a main customer attraction strategy in their stores (Turner, p. 54, 2008). This brief literature review outlines the main problems existing in the retail sector. This includes the large number of layoffs and job terminations which have been taking place in this sector. This problem has led to many skilled executive workers becoming unemployed and searching for jobs. The decline in employment is also evident in the fact that the number of mergers and acquisitions in the last three years has been very small in the retail sector of the UK. This has led to a sharp decline in the need for senior executives, leaving those who have been laid off with fewer job opportunities. Additionally, the retailers have reacted to the decreasing sales by postponing all plans to hire and improve their key management, in order to balance out the income with the expenditures. Other sectors have also been employing such delayed management plans while the financial system recovers to such an extent that the only projects which are carried out are the ones which bring immediate investment, or those plans which cannot afford a further delay in execution in the retail sector (Paulson, p. 74, 2010). Before the onset of this financial crisis, the UK would be making its name prominent all over the world, by setting up new retail brand names on a global scale and making its presence being felt around the world regularly. Also, they would regularly hire workers who were skilled enough to work with the fast flow of this sector, and were capable of executing their plans on short notice. This need for such workers, however, diminished during the financial crisis. METHODOLOGY Methodology is another very prominent part of the research, apart from the identification of aims and objectives of the proposed research. The researcher should ensure that the chosen methodology is effective and appropriate to the research, as an inappropriate one leads to wastage of resources such as time and money. For this research, secondary methodology would be most appropriate to the purpose of the proposed research. It will include studying scholarly articles, journals, books and magazines for the relevant information. Government publications will also be helpful in acquiring information. The main information being researched for will be for the key factors, which helped the UK’s retail sector to survive the financial crisis. In addition, besides secondary research methodology, the researcher will utilize the tools of primary research to acquire real-time data that will provide a realistic approach to the proposed research. In this regard, the researcher will endeavor to interview few businesspersons from the UK retail sector that will provide critical viewpoints regarding the research statement, and thus, will be beneficial for the research outcomes. RESEARCH PLAN # Phases D1 D2 D3 D4 D5 D6 D7 D8 D9 D10 1 Theoretical Framework 1st week 2 Research Proposal 2nd week 3 Secondary Research 3-4th week 4 Analysis of Data 5-6th week 5 Primary Research 7-8th week 6 Interviews 9thweek 7 Analysis 10-11th week 8 Rough Draft of Dissertation 12th week 9 Final Submission 13th week D1: 26 January 2012-01 February 2012 D2: 02 February 2012-08 February 2012 D3: 09 February 2012-22 February 2012 D4: 23 February 2012-07 March 2012 D5: 08 March 2012- 21 March 2012 D6: 22 March 2012-28 March 2012 D7: 29 March 2012- 11 April 2012 D8: 12 April 2012- 18 April 2012 D9: 19 April 2012-25 April 2012 References Cable, V. 2010. The Storm: The World Economic Crisis & What It Means. Atlantic Books. Hiles, Andrew. 2010. The Definitive Handbook of Business Continuity Management. John Wiley & Sons. HM Treasury. 2009. Reforming Financial Markets. The Stationary Office. HM Treasury. 2010. Maintaining the Financial Stability of UK Banks. The Stationary Office. Kolb, Robert W. 2010. Lessons from the Financial Crisis. John Wiley & Sons. Lynn, M. 2010. Bust: Greece, the Euro and the Sovereign Debt Crisis. Bloomberg Press. Macneil, I. and O’Brien, J. 2010. The Future of Financial Regulation. Hart Publishing. Paulson, H. M. 2010. On the Brink: Inside the Race to Stop the Collapse of the Global Financial System. Business Plus. Shiller, T 2008. The Subprime Solution: How Todays Global Financial Crisis Happened, and What to Do about It. Princeton University Press. Turner, G. 2008. The Credit Crunch: Housing Bubbles, Globalization and the Worldwide Economic Crisis. Pluto Press. Read More