According to the UK Retail Food Sector Market Brief, supermarkets made up for about 6400 stores with an estimated value of 98 billion pounds in 2008 (Sainsburys And Waitrose UK Supermarkets Porters 5 Forces Competitive Advantage, 2009).
The UK grocery market has increased to 133.3 billion pound in 2007, which accounts for a 4 percent increase from that of 2006 (Nicholson, 2008, p. 3-4). The major supermarkets that occupy the bulk of the market share (almost 75 percent) are Tesco, Sainsbury’s, Asda (owned by American retailer Wal-Mart) and Morrison’s. These are commonly known as the “Big Four”. The other retail chains include Marks and Spencer (UK’s biggest clothing marketer), Waitrose, Somerfield, Budgens, Netto Iceland, Aldi, and Lidl. Tesco is the largest non-food market chain in the UK which includes outlets like Extra, Homeplus, Metro and others. Each of these retailers focuses on some particular market section. Tesco for instance, marks the middle market offering economy as well as expensive products. Compared to Tesco, Sainsbury’s targets a little up-market while, Asda, a Wal-Mart chain and Morrison’s focus a little down-market. Even Somerfield operate at the same level as Asda and the others namely, Budgens, Iceland, Aldi, Netto and Lidl are all price-focused retailers. Waitrose, a John Lewis Partnership, is however the most up-market retailer among all. Discount retailing has become a growing division of the grocery retailing in UK and Tesco ad Asda contest a strong competition in this field.
Among them, the top position is occupied by Tesco, with a market share of 31.4 percent which is quite ahead of the other retail chains. Second to Tesco is Asda with a market share of 17.1 percent followed by Sainsbury’s occupying the third position. It covers 15.7 percent of the total market. Morrison’s rank last among the four with a market share of 11.2 percent (Nicholson, 2008, p. 6-7).
The market structure exhibited by the