Competition between supermarkets.
To: Mr Elkon From: Karan Varma
Competition between supermarkets
To Mr Elkon,
1.1 In this report I will discuss the major factors of supermarket. I will compare each major issue from they market share value to the numbers of employees they each have. In this essay I will talk about the following supermarkets
- J Sainsbury
1.2 Tesco are the biggest superstore, as they own more than one-fourth percentage of the market share. On Thursday, 21 December 2000 Asda had taken over J Sainsbury as the second biggest market retailer. It has gone good to bad for J Sainsbury, as J Sainsbury's was the UK's number one supermarket until the mid 1990s, when Tesco overtook it. Safeway did try to retaliate to regain they position as number two, that they tried to rebrand itself, with a focus on quality and range.
1.3 Reports from the BBC website published on the 21st December said, “Safeway is the UK's fourth-biggest grocer, but it has been capturing an ever-increasing market share.”
Talking about competition the top 4 supermarkets have been separated into two sections, the top and the low competition.
This is a preview of the whole essay
2.1 In 1995 it shows that J Sainsbury was number one, 5 years later they dropped to place the differences in market share to Tesco today is a high 19.8%. The reason why this could be is that they decide Focus on quality rather than price, which the public would rather buy something that less cheap, so they could save they money for something else. Another point, which I find really shocking, is that J Sainsbury owns 390 more stores than Asda but still have 0.8% less market share value than Asda. A reason for this is that J Sainsbury has an extra 57,000 more employees that Asda do. That is where they could loss money but that is because J Sainsbury does more than 390 more stores. It might seem unbelievable but It say from the BBC site that “ "Asda has an inbuilt advantage, in that its stores are larger than average size and its been filling them with a lot of non-foods. That has enabled it to overtake Sainsbury’s.
3.1 Safeway owns 10% of the market share with a turn over of £9.40 billion. Safeway slogan is mainly or what they are using to appeal to the customers over the other supermarket is that they try concentrates on deep discount on small number of leading brands each week.
3.2 Over the period of 6 – 8 months ago they was a big competition to who is the supermarket that are going to buy a stake of Safeway or take over it. They were bids from all supermarkets from buying a big or a less percentage of Safeway. At the end it was Morrisons, with market share value of 6%. The reasons why many giant superstores was interested was that Safeway was strong in the northwest. Safeway had accepted a bid from Morrison for approximately £3.2billion. The reason why Safeway had decided to sell they business or sell a percentage of they business is that they did not make enough profit but instead they profit had declined as the store said sales in the 12 weeks to 3 January fell 4.1%.
4.1 Tesco owns the majority of the market share value than any other supermarkets they own 26% market shares with a incredible turnover of a huge £25.7 billion. They reason for they success was that they were big on non-food sales. They also recently bought 862 convenience stores to push into neighbourhood retailing.
4.2 The main reason for Tesco and Asda success is that they like I have already mention that they big on non-food sales as well. Asda are big on non-food via George-labelled clothing - the supermarket sector's largest clothing brand. Tesco did copy Asda non-food success as they release they cloths design called Cherokees. Tesco also sell they products all over the world. As they is cheap labour, and land is less cheap. So they could make a bigger profit or deliver they product to where they is cheap labour to somewhere else where labour is high like Great Britain.
5.1 Asda owns 17%, they over took J Sainsbury to claim 2nd place. The reason why Asda has been very successful was that they non-food items. About 20% of Asda's sales are non-food, compared with 10% for Sainsbury. They also lead the way as they cut 1p per litre of the petrol prices.
This pie chart show how much market share value those 5 supermarkets has.
6.1 As Euro 2004 is approaching all the supermarkets have been advertising. They have been cutting prices so when family and friends coming over to people houses, they want those certain people to buy food from they supermarkets. As J Sainsbury went a step further by becoming England national Supermarket and selling medals. As for Asda, they have a picture of Michael Owen on their front page saying, “come on lads” and saying good luck to them against France to give them a positive look about the self.
7.1 To summon up, everything I have talked about, I have made a table talking about they turnover, pre – tax profit, they numbers of employees, average turnover per employee and lastly they other details