Supermarket Industry

Supermarket Industry

  • Submitted By: hd29
  • Date Submitted: 01/17/2010 1:06 PM
  • Category: Business
  • Words: 4506
  • Page: 19
  • Views: 2406

1.0 Market Definition

According to Keynotes: Supermarkets & Superstores (2003), supermarkets are self-service grocery stores selling food, beverages and other non-food goods and services. See Table 1.0 for The Institute of Grocery Distribution’s definition of supermarket industry players (Keynotes: Supermarkets & Superstores, 2002).

Table 1.0 UK Supermarket Industry

|Definition |Description |
|Major Multiples |Grocery retailers with a turnover of over 1bn (excluding co-operatives) |
|Co-operatives |Societies owned ‘co-operatively by those shoppers who pay to register as members |
|Discounters |Small supermarket chains and specialist food shops |
|Convenience |Small stores (below 3,000 square feet) selling a broad mix of products, but predominantly food and|
| |drink |
|Petrol Forecourt Food |Stores are generally no smaller than 2,500 square feet. |
|Retailing | |

2. Market Structure

The UK supermarket industry is led by the `big four' (Times Online, 2009), Tesco, Asda, Sainsbury's and Morrison’s. Thus it can be defined as an oligopoly. In the 12 weeks to 29th November 2009 these four competitors accounted for 75.6% of UK consumer spending on groceries. The market average increase in sales over this period was 4.4%. Tesco hold an ‘actual monopoly’ over the industry, with 30.7% market share. The industry is currently worth £146.3bn and is predicted to grow to £175.9bn by 2014 according to ‘UK Grocery Retail Outlook 2009 –...

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