BTEC Subsidiary Diploma in Business : Unit 32 Food Retailing

The food retail industry in the UK is a growing sector that generates significant revenue for the economy. The industry has grown rapidly in recent years and has faced various challenges. This report discusses the size and structure of the food retailing sector, including different types of retailers such as superstores, co-operatives, farmer's markets, e-traders/online traders, hypermarkets, convenience stores, discount stores, multiples, specialty stores, butchers, fishmongers, bakers, gourmet shops, and forecourt stores. The report also describes the types of products offered by food retailers and the impacts of consumer market development on food retailing. It discusses the impacts of health, safety, and hygiene legislation on the food retail sector and explains how food retailers meet their social, ethical, environmental, and corporate social responsibilities.  

BTEC Subsidiary Diploma in Business
Unit 32 Food Retailing
Mihail Dumitru
1

Table of Contents
Introduction................................................................................................................................2
P1: Describing the Size and Structure of the Food Retailing Sector.........................................2
P2: Describing the Types of Products Offered by Food Retailers.............................................6
P3: Explaining the Impacts of Consumer Market Development on Food Retailing..................7
P4: Describing the Impacts of Health, Safety and Hygiene Legislation on the Food Retail
Sector..........................................................................................................................................9
P5: Explaining the Processes of the Food Retailers to Meet their Social, Ethical,
Environmental and Corporate Social Responsibilities.............................................................13
Conclusion................................................................................................................................14
2

Introduction
The food retail industry in UK is observed as a developing sector of the country that
generates a large amount of revenue to the economy. The food retail industry has grown
widely in last few years and witnessed various issues within this span of time. This study has
tried to focus on all the related issues with the data comparison. This study has also
enlightened the impacts of this development from both the positive and negative aspects. The
discussion of the study has also included the responsibilities and legislative adoption of the
food retailers along with their effects on the wide spectrum of the society.
Task 1: Report on Structure, Size and Product Types of the Food Retailing
Sector in the UK
P1: Describing the Size and Structure of the Food Retailing Sector
Retailing business organizations sell goods to the final consumer for the final consumption.
Large consumer demand has turned this sector into one of the biggest sector globally.
Different selling options are available for retailing.
1. Superstores: superstores offer large variety of goods & establish branches in different
popular destinations. Tesco, ASDA, Sainsbury are such companies. With competitive price &
large stock of goods, superstores can easily attract customers.
2. Co-operatives: to fight the superstores in competition small retailers often develop
cooperatives. This requires very little capital & offers a very small number of goods.
3. Farmer’s market: farmers sell directly to the customer through framers market. This
eliminates intermediaries & thus lowers the price but only grocery products are available in
this type of shop. Some of the prominent farmer markets in UK are Stroud Farmers’ Market,
Cheltenham Farmers’ Market and Winchester Farmers’ market
4. E-traders/online traders: online traders operate based on a online platform. They retain
very few psychical outlets. This store uses different home delivery option to deliver their
products to the customer. Also these stores take orders over the internet.
3

5. Hyper-markets: this is a combination of super stores & departmental stores. In here goods
are divided in different department as well as hyper market maintains a large selection of
goods & branches throughout the country.
6. Convenience stores and discount stores: convenience stores stay very close to the final
customer in term of location & offers different types of daily necessity goods. Discount stores
offer all the goods at a discounted price.
7. Multiples: these are stores that sell only certain item through multiple stores. “Baby &
me” is such type of store that sells baby & mother related goods.
Specialty stores:
Some local stores sell particular goods based on customer demand. These are called specialty
stores.
8. Butchers: Butchers sell different meat items. Some of the UK butcher shops are Borough,
Barbecoa, Chadwicks.
9. Fishmongers: they sell fish & are located in a riverside location. They are popular for
fresh fish items.
10. Bakers: bakers sell fresh quality baked items such as cakes, bread, and pizza.
11. Gourmet shop: These shops sell traditional foods of a locality with high quality
assurance. Melbory and Appleton are two of the biggest gourmet store in the UK.
12. Forecourt stores: they are situated in different refueling stations. They target the
passengers need travelling on the road.
The success of the food retail departments in UK is mostly dependent upon the reliable
information of the public needs along with the overall consumer behaviour. In the words of
Dennis et al. (2004, p.33), the assessment of the widely stretched sector of food retail is
planned on the foundation of healthier food supply.
Market size and share:
According to Fernie et al. (2015, p29), the market share of the food retailing sector in UK has
been developed on the foundation several business factors, such as monthly turnover,
4

numbers of the outlets, annual sales, numbers of the customers, numbers of the employees
and the statistics of sales. All these factors are usually recognised as the utility factors in the
size of the overall food retailing sector. In most of the cases, the summation of all these
factors is recognised as the total size of the food retail sector in UK. They are often found
collaborated with some other beneficial factors, which are mostly related with the consumer
growth. The sudden changes in the consumer behaviours or any sort of switch-attention
incidents are potential to change the size of the entire sector of food retail.
The structure of the food retailing sector is considered as another major tool in UK. It is one
of the superior most key factors to definite the growth of the food retailing business in all
over UK. In the words of Freathy (2003, p.41), food retailing sector in UK is stretched up to a
wide spectrum and developed with numbers of outlets. Most of the businesses in this sector
are structured with the formations of outlet.
In 2015, consumption of food, drink & catering soar to 205 billion GBP. Only food & drink
retailer added a value of around GBP 20 billion. At the same time 54000 companies created
almost 1157000 jobs in the UK economy. Food & drinks retailer consists of the GBP 30
billion in the UK market share in 2014 (Fernie and Sparks, 2015).
Figure 1: Grocery Market Shares for 2015 (Fernie and Sparks, 2015)
5

In March 2015 UK grocery industry experienced a 1.7% increase from 2014 & valued as
GBP 177.5 billion. Cost for grocery accounted for 9% of the total cost & it has emerged as
the 3rd largest expenditure after housing & transport. Around 85000 retailer have been
registered in 2015-2016 & this excludes differ online retailer which also consists a large
portion of the industry.
6

P2: Describing the Types of Products Offered by Food Retailers
Three of the food retailers have been selected such as Tesco Plc as Superstore, Winchester
Farmers’ market as Farmers’ market, Edinburgh Farmers' Market as Cooperative store.
Product ranges offered to the consumers by TESCO PLC
Tesco is one of the largest retailers in UK & offers a large variety of goods. It also maintains
a large number of outlets throughout UK. In the dairy food section it sells low-fat milk,
cheese, butter, premium meat, ordinary milk & many more. In the Bakery food department,
Tesco has different types of Low sugar, bread, cake, high sugar, low fat, pie, loaves etc. the
fish department serves different types of sea foods & fishes imported from outside of UK.
Except for these Tesco also maintains department such as Fresh food items, Frozen food
items, Fast Food items, Beverages, Diet. The first food section is enriched with pasties, fried
items, pizza, pasta & many more.
Tesco outsources these goods from 3rd party supplier & sells them under its own brand name.
For this Tesco also maintains strong quality management team. Some of Tesco’s brand names
are fresh food, dairy cabinet, ready cook range, bakery goods, dry goods, groceries,
Each goods are available in its department under the sub range. This has greatly facilitated
the shopping experiences creating good value for Tesco shopper.
Edinburgh Farmers' Market
Sumo Whole foods is a cooperative by nature & produces bakery, grocery & dairy items. In a
large outlet it sells goods that are in great demand. It doesn’t maintain a large inventory just
as Tesco. The outlets are more localized in nature & offer large number of goods compared to
Winchester Farmers’ market. Dairy milk, milk low fat, are cheese butter are the dairy product
of the market. Fish, meat etc. are frozen foods. As it is cooperative in nature so this market
helps the consumer to get fresh food as well it provides opportunity for seller to sell in good
prices.
7

Winchester Farmers’ market
This stories a farmers market & mainly sells products that are produced in farm land.
Products include vegetables, fruits, fish, meat, eggs, and milk. As has been discussed earlier,
it is very successful in attracting customer due to guaranteed freshness, good value for the
money, low cost goods. It maintains a periodic storage of the goods & has fewer stores in the
locality. No particular brand has been developed rather a label of premium & non premium
is attached to the goods.
Task 2: Report on Developments in the Consumer Market and their
Impact on Food Retailing
P3: the Impacts of Consumer Market Development on Food Retailing
Customer expectations and demand
Over the times the sector is shaped by a most potential element which is demands and
expectations of customer. In case of a food retailer, customers would look for quality food
with health value, rationale price, ease of buying and large variety of choice etc. and as per
customers’ requirement organizations which are doing business in retailing food items
continuously promote their value chain and models of business.
Higher consumer spending
It is food retailing sector which has faced more impacts of higher consumer spending than
any other business sectors. 0.8% increase in GDP in UK in the last 3 months of 2015 has
caused the equal percentage of increase in consumption level of consumers. According to
statistics, weekly about £412 is spent by each adult consumer (FoodManufacture.co.uk,
2015). Many outlets have been established for addressing this increase and as well as for
collaborating with supply increase.
Cultural and lifestyle expectations and increased immigration
The culture and lifestyle of consumers has very transparent impact on food retailing business.
With the opening, import and expansion of new food items food retailing sector has
responded to the cultural diversity. If we find the influence of culture, in UK there exists wide
diversity of culture because people from different countries come here and migrate here.
Having origin from various countries these people have typical taste for foods and thus their
8

expectation from the food retailers also varies (FoodManufacture.co.uk, 2015). A practical
situation may be when an Indian search for mix a lot of different types of spices in their
foods. For this reason superstores keep a collection of various Indian spice items to address
the typical demands of Indian consumers. Recently in UK, particularly the fast food sector
has experienced a wide impact of the migration from the Middle Eastern countries.
Workdays and holidays
People of UK are experiencing more and more dynamic lifestyles. Being closely related to
the lifestyle food sector has simultaneously coping with the emerging needs and diversified
tastes requirements of consumers. Fast take-out food service, easy cook meals, etc. are
presented by food retailers to help the consumers who are trying to balance their work lives.
Increased Mobility and technological developments
By introducing online traders and more shopping outlets at each local area food retail sector
is addressing the consumer needs for mobility and instant shopping. Increase of the number
of hopping outlets has been already described. Online shopping, easy payment methods,
aster counter service, etc. are examples of technological development in the food retailing
sector. Thus food retailers are directly responding to the most complex customer demands
and the development in the consumer market
Seasonal changes
Because of supply shortage some food items become uncommon after certain seasons. But
superstores and hypermarkets, to meet the existing customer demands, handle to supply them
from somewhere else. In this case they promote the international supply channels (Newman,
2012).
Attitude towards the environment:
Following the social ethics and farm duties towards consumer ethics indicates constructive
attitude towards the ecological and other related issues. More than any other time, nowadays
consumers are demanding businesses which are environment-friendly.
The wide-range use of safe and ‘green’ packaging in the place of polyethene or plastic
materials have been the consequence of increased customer consciousness for environmental
safety
It has been also figured out that perception of customers is continuously changing in UK
market. The social and cultural life of UK people is supposed to be different from that of the
other countries which has major impact on food retailers in UK. It has been also noted that
9

most of the people in UK prefer to eat low calorie food for keeping their health fit and
healthy. The frequent cultural development has also major impact on the food market of UK.
The attitude and behaviour of UK people is continuously changing and it creates major issues
for most of UK food retailers.
The recent developments in the consumer market have greatly influenced the food retailing
sector of UK. It has brought several timely methods to the business organisations, which have
benefited both the retailers and the consumers. They have also enabled several actions, which
have encouraged the farmers as well in producing more products to sell in the growth
markets. As opined by Seth and Randall (2007, p.28), the in initiatives taken by the retailers
have been proved as a great contribution in the society as well, which have changed the entire
scenario of distribution largely. They have also contributed towards the environment by
enabling several guidelines, such as Climate Change Levies, Town Planning Guidance, and
Sustainability of the Products. The advancement of the technology had also been addressed in
their development measures, which included bar coding, scanning, marketing tools and
loyalty cards.
However, in the contradictory notes of Garcia Martinez et al. (2013, p.1109), the impacts of
consumer market development is not fruitful always. In most of the cases, the recent
development modules of customer development have brought negative impacts to the
consumerism culture of the society. In most of the cases, it is found that the less popular
products are being obsolete from the market quickly, which is highly discouraging for the
competitive growth of the markets.
Task 3: Report on the Importance of Health and Safety Legislation and its
Impact on Food Retailing
P4: Describing the Impacts of Health, Safety and Hygiene Legislation on
the Food Retail Sector
There have always been a wide range of impacts of health, safety and hygiene legislations in
the context of food retail sector. However, the parameter of these impacts has been increased
largely in the recent phase of business. The most relevant laws in the context of food retail
sector of present era are as follows:
Law Description
10

Health and Safety at Work Act 1974 Health and Safety at Work Act ensures the
safety of the employees in a workplace. The
most prioritised issue of this law is to enable
the safety measures for the employees. It
includes all the safety measurements for the
employees both during their entries and
exits. This act is also liable to provide the
employees safety from the contagious issues
as well. Thus, it is recommended to all the
workplaces to keep their toilets and floors
clean always. Under this law, the
managements of the workplaces are also
liable to allow the employees to have their
needful diets. This act also insists the
managements to run special training
programmes for the employees to teach
them the best avenues of health protection.
Health and Safety First Aid Regulations
1981
This act usually requires the employers to
provide their employees an adequate amount
of equipments for the best services. It also
includes the appropriateness of the
equipment usages. This act insists the
managements of the companies to provide
all sorts of health care benefits and take the
needful steps if required. Under this law, the
employers always liable to provide their
employees the sudden needs of first-aid.
Diseases and Dangerous Occurrences
Regulations 1995
This is one of the highest prioritised laws
within the workplaces that requires the
employers to keep records of all the work-
related accidents, death accidents, serious
injuries, industrial diseases and other certain
11

dangerous occurrences. It always
recommends the employers to address the
issues prominently and take needful actions
to protect the employees.
Control of Substances Hazardous to Health
(COSHH) 2002
This act provides a major framework to help
and protect the people in the workplaces.
The safety measurements are usually related
to the health risks issues from the hazardous
substances. It refers to a sensible and step-
by-step approach to cure the affected
persons. It s also found highly cost effective
for the companies and liable to improve the
morale of the employees.
Food Safety Regulations 2005 In UK, this act is prioritised with a goal to
ensure the quality of the food. However, the
major focus is implied on the safety
measurements of the offered food to the
employees. Under this law, employers are
liable to remove the hazardous substances of
the foods.
European Union Regulations on Food
Hygiene
The labelling directives are considered as
the only piece of EU legislations, which
priorly refer to the allergic foods. It always
prevents the diseases of the employees
caused due to the consumption of
unhygienic foods.
Hazard Analysis Critical Control Point
(HACCP)
It is considered as a systematic approach
towards the safety measurements of the
food. It takes care of the food safety from all
biological, chemical and physical hazards.
Under this act, the employers are
12

responsible to take care of the foods meant
for their employees. The management is also
recommended to run examinations over the
quality standards of the food products meant
for the customers.
Table 1: Health, Safety and Hygiene Legislation on the Food Retail Sector
(Source: Independent.ie, 2016)
Food Safety Regulations 2005
● Food retailers are liable to assure the safety of their food products
● Food retailers are always suggested to keep examining their substances and
ingredients in the definite intervals
● Quality of the foods is always recommended and that too without compromising the
safety
● The management of the food retailers are always recommended to keep records of
their purchases and deliveries
● The percentage of the health substances are meant to be mentioned on the food
products
● Food retailers are suggested to test their food products from hygiene department in
every definite interval
European Union Regulations on Food Hygiene
● Food retailers are always liable to provide the safe food products to their customers
● Food retailers are recommended to remove all the Allergic substances from foods
● The hygiene of the food products are required to be the primary concern for the
retailers
● Food Retailers are also liable to add nutritious benefits to the products without
compromising with the hygiene
As opined by Hammond (2007, p.30), the food retailers in UK are recommended to follow all
the guidelines of the laws in order to ensure the safety of the people. They are also suggested
to categorize their food substances and deliverables according to their safety measurements.
Expert health opinions are also recommended to the retailers for their consideration.
13

The health, safety and hygiene legislation have impacted the entire food retailing sector
extensively. In the words of Feldmann and Hamm (2015, p.157), the health, safety and
hygiene legislation have ensured the public safety widely with an aim to protect their lives
from any harms. The recent adoption of the legislations by the leading food retailers has
succeeded to project a safety goal to their customers. It has also changed the perception of
their customers towards the health benefit goals. However, in the argumentative words of
Fernieet al. (2015, p.37), many outlets of the food retailers at the remote areas are still
lagging behind to ensure the safety measurements for the customers.
The importance of the adoption of the legislative and regulatory controls on food retailers
have been observed with high priority. According to Seth and Randall (2007, p.39), the
quality measurements of the food products are liable to ensure a healthy lifestyles of the
residents. It is also liable to ensure the health of the future generations as well. The safety
measurements on the food products as per the legislation and regulatory control are also
liable to increase the trustworthiness of the retailers towards the consumers.
Task 4: Report on Social, Ethical, Environmental and Corporate Social
Responsibilities in Food Retailing
P5: Explaining the Processes of the Food Retailers to Meet their Social,
Ethical, Environmental and Corporate Social Responsibilities
The process of meeting the social, ethical, environmental and corporate social responsibilities
leads the food retailers to achieve trustworthiness towards the consumers. They are also liable
to produce more safety measurements for the wide spectrum of users in a society.
The social responsibilities of the food retailers refer to the production to be aligned with the
social changes. It also indicates at the products to suffice the needs of the customers. It
includes the socio-economic changes of the society, which are comprised with several issues,
such as ethnic tastes, immigrant demands, foreign travel, food consumption patterns and
lifestyles. This process also refers to the work-life balance of the customers and leads to
provide food products accordingly. As opined by Kahn and McAlister (2003, p.20), the social
factors also acknowledge the needs of the children along with the demand of the future
generation consumers.
Ethical responsibilities of the retailers refer to fair trading at the initial point. It always
recommends the retailers to operate fair trade activities in order to ensure the equity of the
14

brands. Participating in the local trade is considered as another major ethical responsibility
from the end of the retailers, which energise the national business structure with wide
spectrum. They are always recommended to be loyal to the local economy and do the
needful. Prioritising the public health is one of the top priorities for the retailers that ensure
the healthy livelihood for the generations of people. Under the ethical responsibilities, the
food retailers are liable to produce non-animal tested products as well. On the other hand, it
has been also figured out that most of the food retailers such Tesco and Asda also provides
customised products and services based on occasions of the people of UK.
Environmental responsibilities of the food retailers are involved with the impact of the
environment mostly. As per this responsibility, the food retailers are liable to contribute
towards the benefits of the environment. They are recommended to include all the growing
and production methods under this factor. Achieving the environmental goals always lead the
retailers to their desired success, as it is aimed at the overall public interests. This
responsibility refers to ensure the safety of diverse issues, such as packaging, refrigeration,
production controls, sustainable sourcing, and organic produce.
Corporate Social Responsibility of the food retailers is usually comprised with all the above
mentioned issues, as it recommends them to follow all the needful. According to Poloian and
Rogers (2003, p.18), ensuring the social, ethical and environmental responsibilities lead them
to achieve all their corporate social responsibility goals.
Leading food retailers are always recommended to follow their responsibilities with all
needful priorities in order sustain in the consumer market for a long-term. Tesco has also
followed all the terms of responsibilities categorically, which have led them to achieve the
top position in the customer market of UK. Tesco has enabled prior actions to follow their
social, ethical, environmental and corporate social responsibilities since very early.
According to Dennis et al. (2004, p.26), following all the process of responsibilities have
allowed them to enjoy the highest market share of the food retail sector in UK.
Conclusion
The food retailing sector in UK is at a growing spectrum and developing rapidly since the last
few years. However, in many cases, they have been observed witnessing major problems to
gain the desired benefits. This study has focused on the every details of the food retail
industry and discussed the issues related to it. It has also analysed the diverse goals of the
sector along with monitoring the market shares of the leading retailers. This study has
discussed the issues from the customer perception as well and recommended the retailers to
15

enable needful actions. This study has also focused on the responsibilities of retailers along
with the benefits of them.
16

Reference List:
Dennis, C., Fenech, T., Pantano, E., Gerlach, S. and Merrilees, B. (2004).e-Retailing.
Abingdon: Routledge.
Feldmann, C. and Hamm, U. (2015), Consumers’ perceptions and preferences for local food:
A review. Food Quality and Preference, 40(1), pp.152-164
Fernie, J., Fernie, S. and Moore, C. (2015). Principles of retailing. Abingdon: Routledge.
Food.gov.uk (2016), ‘Regulation and legislation’, Available at
https://www.food.gov.uk/enforcement/regulation [Accessed on 14 August 2016]
Freathy, P. (2003). The retailing book: Principles and applications. New York: Pearson
Education.
Garcia Martinez, M., Verbruggen, P. and Fearne, A. (2013), Risk-based approaches to food
safety regulation: what role for co-regulation?.Journal of risk research, 16(9), pp.1101-1121
Hammond, R. (2007). Smart retail: how to turn your store into a sales phenomenon. New
York: Pearson Education.
Independent.ie (2016), ‘Food news’, Available at: http://www.independent.ie/life/food-
drink/food-news/lidl-recalls-packets-of-peanuts-for-failing-to-tell-customers-they-contain-
nuts-34925318.html [Accessed on: 25 July 2016]
Kahn, B.E. and McAlister, L.M. (2003).Grocery Revolution: The Focus on the New
Consumer. London: Longman.
Lee, H.J. and Yun, Z.S. (2015), Consumers’ perceptions of organic food attributes and
cognitive and affective attitudes as determinants of their purchase intentions toward organic
food.Food quality and preference, 39(1), pp.259-267
Paul, J. and Rana, J., (2012), Consumer behaviour and purchase intention for organic
food.Journal of consumer Marketing, 29(6), pp.412-422
Poloian, L.G. and Rogers, D.S. (2003).Retailing principles: a global outlook. New York:
Fairchild Books.
Seth, A. and Randall, G. (2005).Supermarket Wars. London: Palgrave Macmillan.
Seth, A. and Randall, G. (2007).The grocers: the rise and rise of the supermarket chains.
London: Kogan Page Publishers.
17

Appendix:
Appendix 1:
18