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Property sector analysis

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Introduction

Property Sector Analysis: Food Retail(supermarkets) I am conducting a report on the current state of the food retail industry with supermarkets being my main focus. Smaller family run convenience stores will also be analysed and my main supermarket focused on is Tesco, which is number one in the UK. What is a supermarket? The core purpose of the food retail industry is to provide the public with a place to purchase food. This sounds a simple task but its a type of industry that is essential in todays society and needs to be done effectively. The days of people growing or providing their own food are minimal and the public now have come to expect that everything that they require is all under one roof. Each supermarket will have a different customer base but the most succesful supermarkets appeal to a variety of social classes. Tesco has become extremely successful recently for this reason. They used to be seen at aiming their products towards a lower social class but changed their stategy and tried to appeal to the higher classes. They did this by bringing in the Tesco 'finest' range. This gives a bigger variety for customers appealing to a broader group of people. Services and products offered by most supermarkets in the UK * Alcoholic products * Baby foods and products * Bakery * Books, newspapers and magazines * Car products * CD's and DVD's * Confectionary * Cosmetics * Clothing and footwear * Electrical items * Hygiene products * Financial services ...read more.

Middle

This again is causing an increase in share prices with people anticipating the value of Morrisons to rise. Economists have generally been pleased with the new 'big' supermarket dominance, due to more jobs nationally becoming available. However, in the case of the Morrisons take over, there were altercations. It was said that an initial 1,200 non-store staff would lose their jobs. They said that these numbers would be replaced by increasing the number of staff within the stores and that potentially new stores could be constructed if the company has the success it predicts. Therefore creating more jobs in the future. Success within a business usually has a positive correlation with the number of staff that they employ. This is a good thing for local communities as when/if the success does happen, local jobs will become available. An economists view on this though could be a negative one as they feel that the whole British public could suffer. With the big supermarkets getting bigger and the small ones disappearing, it leaves less competition, meaning that their prices don't need to be as competitive. It's a monopoly effect and the big chains of supermarkets could boss prices too much. They are also putting farmers out of business, as they are not using the British produce as much as they have done in the past. Food retailers must also be aware of the word sustainability. Every company will look at this word differently and decide how they want to combat it. ...read more.

Conclusion

It is not just as easy as that though. Like I have said this is what Tesco have done but they have had to think of how to do it successfully. They needed to situate their stores in areas that needed a little bit more than just your regular corner shop. Their new express stores have done this. They have been positioned in locations that are where their competition is minimal. One of these types of places is at petrol stations. Everyone who purchases fuel will be required to enter the store meaning that potential sales are there. This is not to mention the surrounding community who may require a few items that wouldn't normally of been available. In conclusion I would like to say that the food retail industry is definitely moving in one direction. The small corner shops are dying out and the 'big' supermarkets are only getting bigger and will continue to do so. We must be careful not to allow any of the 'big 4' to become too big as they could dictate the market. At present the competition is perfect, keeping prices low. In the future I can see that the 'big 4' will control most aspects of the food retail industry and you will see small convenience stores like Co-op and Spar slowly die out. You have already seen this happen with the family run corner shops as there a far less than there used to be. The reason for this is that power lies with money and the big supermarkets can afford to buy the properties in the prime locations. ...read more.

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