Comparison of Supermarkets' Financial Performance

This report compares the financial performance of discount supermarkets (B&M) with other big supermarket chains (Tesco, Morrisons, Sainsbury's). It analyzes their earning per share, net profit margin, operating profit margin, and EBIT to determine which company is more powerful in terms of market share. The report also provides a statistical analysis of the companies' frequencies using mean, median, mode, and mode values. The findings suggest that B&M has shown steady growth in earnings per share compared to Tesco and Sainsbury's, which experienced a decline followed by rapid increase.

Business Decision Making

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
Task 1...............................................................................................................................................3
Primary Data collection and analysis.....................................................................................3
Findings:................................................................................................................................5
..........................................................................................................................................................9
TASK 2 .........................................................................................................................................15
Secondary data collection and analysis................................................................................15
Findings:...............................................................................................................................16
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................20
Online...................................................................................................................................20

INTRODUCTION
Business decision making is an important factor for the growth and enhancing the
profitability of the business. In this report, It will include B& M and Home bargains which are
the discount chains in UK. Also, It will include Tesco which is a big super market and provide
various groceries products and convenience products. In this assignment, It will provide the
primary data and its analysis for making effective business decision. Moreover, it will include
secondary data which will include the data of 3 years.
Task 1
Primary Data collection and analysis
Primary data collection refers to using the first hand information regarding the research to
identify the views and opinions of the customers to have authentic and reliable data(Thomas,
2015). The primary data is collected through the use of questionnaire, survey etc. (Johnston,
2017)
Survey methodology : The survey will be conducted through the use of questionnaire in
which the questions will be asked to customers to identify their preferences(Etikan, Musa,and
Alkassim., 2016).
Sampling framework : The sample is related to choosing the small group for the survey
from the large population. For this survey it has used the simple random sampling for gathering
the primary data(Schilling and Neubauer, 2017). It has included the sample of 15 respondents to
identify the information for providing better services to customers(Dewenter and
Malatesta,2016).
1. In which age range of age people are more influence towards the super market
 0- 10
 10-20
 20-30
 40 and more
2. Which gender group is attracted most towards super market?
 Male
 Female
3. Which category of education you have attained?

 Graduation
 Diploma holder
 Post graduation
 All the above
4. On an average in which income range do you prefer to spend on super market ?
 £0-£50
 £50- £100
 £100-500
 £500 and more
5. According to you which factor attract more customers towards the discount super market ?
 Location
 Price
 Discounts
 Product range
6. On what basis the customer compare between discount super market and UK big
supermarket ?
 Product variety
 Branded product
 Home delivery
 Ambience and space
7. According to you, which super market provide more varieties of products?
 B&M and Home Bargains
 Tesco
8. Which super market you will prefer more in context with the product quality they offer?
 Sainsbury
 Home Bargains
 Morrisons
 Tesco
9. Which super markets prioritize the best and convenient home delivery services
 Tesco
 B&M

10.which supermarket is providing higher discounts on goods for attracting the customhouses?\
 Home Bargains
 Tesco
 Morrisons
 B&M
Findings:
1. In which age range of age people are more influence towards the super market
Frequency Percent Valid Percent Cumulative Percent
Valid
1 2 13.3 13.3 13.3
2 3 20.0 20.0 33.3
3 8 53.3 53.3 86.7
4 2 13.3 13.3 100.0
Total 15 100.0 100.0

Interpretation:
From the above table and bar graph it can be interpreted teat the major of the proportion
of age group of 20-30 are more concerned about the shopping at super markets. These people get
influence towards the variety of offers by super market as they considered to be in the age of
adults and adults are more conscious about their living standard and spendings which ultimately
lead them to get more attracted toward the supermarkets offering great varieties.
2. Which gender group is attracted most towards super market?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 5 33.3 33.3 33.3
2 10 66.7 66.7 100.0
Total 15 100.0 100.0
Interpretation:
From the above pie chart and table it can be clearly identified that Females are more
intend about the discounts and varieties offered at super markets as Females are concerned
towards more shopping which ultimately encourage them in getting attracted towards the super
markets offering higher discounts. As discount make them available the branded goods with

cheaper prices which resulting in higher satisfaction among them which enhance more shopping
and getting more discounts ultimately benefiting the supermarkets also by capturing larger
market share and generation of loyal and strong brand value.
3. Which category of education you have attained?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 4 26.7 26.7 26.7
2 2 13.3 13.3 40.0
3 3 20.0 20.0 60.0
4 6 40.0 40.0 100.0
Total 15 100.0 100.0
Interpretation:
The above pie chart depict that all the people with different qualifications that is diploma
holder, graduated, Post graduated are influencing with the varieties and offers available with
super market. They seek to purchase the goods and services which is offering great quality with
cheaper prices. All the students and degree holders seeks to save more and supermarkets
providing discounts attract these students as there is a great opportunity for saving more and
consuming the goods with better quality which helps in increasing their living standard and also

benefit the companies and supermarkets in capturing the student customer segment which helps
in generation of greater and loyal brand value in mind of the people.
4. On an average in which income range do you prefer to spend on super market ?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 2 13.3 13.3 13.3
2 3 20.0 20.0 33.3
3 8 53.3 53.3 86.7
4 2 13.3 13.3 100.0
Total 15 100.0 100.0
Interpretation:
The above table depicts that major of the proportion of sample size is spending in range
between the £100-£500 as people are more intend regarding their standard of living which
enhance them to spend more. This also benefited the company as they can earn good amount of
profit from people spending on their products and services. Customers do not intend to sped
more than £500 as they prefer to save. This range is appropriate for the customers to fulfil, their
needs and wants which helps in their psychological satisfaction and also in achievement of

organisational goal. The people do not spend much on the products as this considered to be
wastage of financial resources. People intended to save and invest more rather than expenses.
Generally a medium range of spending is been spent on the goods which are capable of
satisfying the needs and wants of the customers.
5. According to you which factor attract more customers towards the discount super
market ?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 3 20.0 20.0 20.0
2 3 20.0 20.0 40.0
3 6 40.0 40.0 80.0
4 3 20.0 20.0 100.0
Total 15 100.0 100.0
Interpretation:
Discount factor considered to be the most attractive factors for getting attracted towards
the super market. Discount offers leads in greater satisfaction of the customers as it helps them in

purchasing and consuming high quality of products and services at lower prices which result in
grater satisfaction ad also helps in retention of the customer for long in the super markets.
Discount offers help supermarket in creating their sales which leads to higher profitability and
ultimately helps in expanding their market share and loyalty towards the customers.
6. On what basis the customer compare between discount super market and UK big
supermarket ?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 4 26.7 26.7 26.7
2 3 20.0 20.0 46.7
3 5 33.3 33.3 80.0
4 3 20.0 20.0 100.0
Total 15 100.0 100.0
+
Interpretation:
Home delivery is the most crucial element on the basis of which customers compare the
supermarkets that in which they need to go to avail the best offers. Home Bargains, Tesco,
Morrisons and other companies all are offering different discount offers. Th customers will
compare the discount offers of different companies and will prefer to go with company which is

providing the best quality with higher discounts as this will benefit the customers as they get
higher satisfaction by paying low for the products and services they buy at supermarkets.
7. According to you, which super market provide more varieties of products?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 10 66.7 66.7 66.7
2 5 33.3 33.3 100.0
Total 15 100.0 100.0
Interpretation:
B&M and Home Bargains re providing more varieties of the products to the customers so
that they can attract many customers and avoid the risk of substitution. More variety leads in
attraction of more customers which further helps them in capturing larger share of the market
which enhances profitability. Customers also seeks for the market where they can find larger

variety under one roof which helps them in greater satisfaction mad ultimately leads to
achievement of the organisational goal of providing satisfaction to eth customers and increasing
sales and profitability of the organisation.
8. Which super market you will prefer more in context with the product quality they
offer?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 3 20.0 20.0 20.0
2 5 33.3 33.3 53.3
3 3 20.0 20.0 73.3
4 4 26.7 26.7 100.0
Total 15 100.0 100.0
8. Which super market you will prefer more in context with the product quality they
offer?
Interpretation:
From the above chart and table it can be interpreted that Home bargains will be more preferable
in context with the product quality as they are offering high quality products' and services which
is the reason for their grater market share in the complete industry. Home Bargains provide great

quality with higher discounts which is the reason for its large market share and growth. The
customer will attract to discount offers only when they are able to get good and standard quality
of products as customers never wants to compromise with the quality they receive.
9. Which super markets prioritize the best and convenient home delivery services
Frequency Percent Valid Percent Cumulative Percent
Valid
1 5 33.3 33.3 33.3
2 10 66.7 66.7 100.0
Total 15 100.0 100.0
Interpretation:
From the above graph and table it can be interpreted that B&M are providing the best and
convenient home delivery services as they are focused towards the satisfaction of the customers
in order to attract more and more customers and make them retain for longer. They providing
quality goods and services so that customers get stick to the super market and do not substitute
them from others. The major of the proportion of the population has responded for the B&M as
these are discount supermarkets and by providing quality services they are major attraction of the
population.

10. Which supermarket is providing higher discounts on goods for attracting the
customhouses?
Frequency Percent Valid Percent Cumulative Percent
Valid
1 6 40.0 40.0 40.0
2 3 20.0 20.0 60.0
3 2 13.3 13.3 73.3
4 4 26.7 26.7 100.0
Total 15 100.0 100.0
Interpretation:
From the above pie chart it can be interpreted that Home Bargains are providing higher
and great discounts to the customers as they considered many factors while they decide to buy
the product from super market including price discounts, brand and ambience, delivery services.
Offering discounts also make the company to capture the great share in the market which will
helps them in their further growth and development. They also can achieve their organisational
goal and increase the profitability by attracting the more customers towards their company and
supermarket. They can also target the new customer segment by offering discount and providing

higher quality at low prices which will ultimately helps in expanding their market share and
creates customer loyalty towards the product.
TASK 2
Secondary data collection and analysis
Raw data of B&M and Tesco
B&M
2016 2017 2018
EBIT 155 183 229
Operating Income 181 205 240
Revenue 2035 2431 3030
Earning per share 0.12 0.14 0.19
Tesco
2016 2017 2018
E BIT 162 145 1298
operating income 980 1168 1564
Revenue 54433 55917 57491
Earning per share 0.02 -0 0.15
Sainsbury
2016 2017 2018
EBIT 548 503 409
Revenue 23506 26224 28456
operating income 707 642 518
Earning per share 0.24 0.017 0.13
Findings:
2016
Profitabil Formula B&M ratio Tesco ratio Sainsbur ratio

ity ratio y
EBIT
ratio EBIT *100 155 7.62% 162 0.30% 548 2.33%
Revenue 2035 54433 23506
operating
profit
margin
operating
profit *100 181 8.89% 980 1.80% 707 3.01%
Revenue 2035 54433 23506
Interpretation:
From the above ratios it can be computed that Net profit margin is better of B&M
compared to Tesco and Sainsbury as its earning before interest and taxes is good with the ratio
of its revenue while earning of Tesco and Sainsbury is high but not with the ratio of its revenue
which clearly depicts that B&M ha greater net profit margin and operating profit margin as its
operating profit is much higher in ratio with the revenue while Tesco and Sainsbury has higher
operating profit but not with its revenue with these profitability ratios it is clearly understood that
B&M has better net profit margin and operating profit margin.
2017
Profitabil
ity ratio Formula B&M ratio Tesco ratio
Sainsbur
y ratio
EBIT
ratio EBIT *100 183 7.53% 145 0.26% 503 1.92%
Revenue 2431 55917 26224
Operatin
g profit

margin
operating
profit *100 205 8.43% 1168 2.09% 642 2.73%
Revenue 2431 55917 23506
Interpretation:
From the above, interpretation can be made as in the year 2017 Net profit margin of the
B&M is better than Tesco and Sainsbury as its earning before all the interest and expense is
good in relation with its revenue whereas Tesco earnings are high but not in ratio with its
revenues. They earning good amount of revenue but their operating profit is less in context with
the revenue Similarly, operating profit margin of B&M is high comparatively to Tesco and
Sainsbury because operating profit in context with the revenue is better of B&M compared to
Tesco and Sainsbury
2018
Profitabil
ity ratio Formula B&M ratio Tesco ratio
Sainsbur
y ratio
EBIT
ratio EBIT *100 229 7.56% 1298 2.26% 409 1.44%
Revenue 3030 57491 28456
operating
profit
margin
operating
profit *100 240 7.92% 1564 2.72% 518 1.82%
Revenue 3030 57491 28456
Interpretation:
From the above table of profitability ratio it depicts that in the year of 2018 also B&M
have higher profit margin and operating profit margin than Tesco and Sainsbury because B&M

earning before interest and taxes is better in context with its revenue whereas Tesco and
Sainsbury has high EBIT but not in context to revenue that why their et profit margin is low
compared to B&M. Similarly, B&M operating profit is good in relation with its revenue and
Tesco's and Sainsbury operating profit is very less in context with the revenue which resulted in
low operating profit margin of the Tesco and Sainsbury compared to B&M.
Earning per share 2016 2017 2018
B&M 0.12 0.14 0.19
Tesco 0.02 -0 0.15
Sainsbury .24 .17 .13
Interpretation:
From the above graph it can be interpreted that from the year 2016 to 2017 B&M has
increase their earnings per share with slow rate and from 2017 their earnings per share increased
with higher rate which leads to greater success and growth of the company. Whereas from 2016
to 2017 Tesco and Sainsbury earning per share tends to fall continuously and from the year
B&M Tesco Sainsbury
0
0.05
0.1
0.15
0.2
0.25
0.3
2016
2017
2018

2017 it increases with very high rate which leads the company towards the success path and
helps ion their further growth ad development.
CONCLUSION
From the above report it can be concluded that the discount super markets(Home
bargains and B&M)and other big Super markets(Tesco, Morrisons, Sainsbury's) earn by
providing different offers, discounts and varieties to the customers so that customers get attracted
and retain for long run. The above report also conclude about the comparison between the
financial data(net profit margin, operating profit margin, EBIT) and statistical data through
frequencies (Mean, median, Mode) of both the super markets is also computed which helps in
ascertaining the company which is more powerful and have a strong market share because of the
strategies they adopted.