Current Trends in Supermarket Sector and Tesco Performance
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Added on 2022/12/22
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This report analyzes the current trends in the supermarket sector, including the focus on health and wellness and the use of technology. It also examines the performance of Tesco since October 2015, including sales and profitability. Recommendations for improving Tesco's financial performance and market share are provided.
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TABLE OF CONTENTS INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Current trends in supermarket sector..........................................................................................3 Tesco performance since October 2015......................................................................................3 Aldi and Lidl financial performance...........................................................................................4 SWOT analysis of Tesco.............................................................................................................4 Recommendation for improvement to Tesco..............................................................................5 CONCLUSION................................................................................................................................5 REFERENCES................................................................................................................................7
INTRODUCTION Business is referred to as the entity which deals in buying and selling of the goods and services to the consumer against some consideration. For the success of the business, analysis of external environment is very essential as it provides details of the changes taking place in external environment. The present study is based on Tesco which is the largest supermarket chain in UK and was founded in 1919 by Jack Cohen. The current report will outline the current trends within the supermarket along with performance of company since 2015. Further it will analyse the financial performance of Aldi and Lidl who are competitors of Tesco. In the end SWOTanalysiswillbeconductedandsomerecommendationonimprovingfinancial performance and market share will be provided. MAIN BODY Current trends in supermarket sector The business environment is changing to a great extent and because of this there are many different changes taking place in trends among consumer. Latest trend in supermarket sector within UK are as follows- Currently, the consumers are becoming more conscious relating to their health and consumption of healthy and organic food. This is the most common change among the consumer as their focus has increased much on wellness and health (Retail trends 2021, 2021). In addition to this, another trend in supermarket chains in UK is the use of technology in producing and delivering the products to the consumers. For example, use of AI, robotics, interactive fitting rooms, scan pay go technology and many others. Tesco performance since October 2015 The performance of Tesco since October 2015 is continuously increasing and this resulted in increase in profit. With help of the comparative overview of the company financial performance it was analysed that the sales of company are increasing since 2015. In addition to this, with view of sales by region as well the revenue of company is eventually increasing (Five- year record, 2021). Hence, this resulted in the overall increase in the sales of the company. Further when it comes to profitability of the company, the operating profit of the company is also
gradually increasing. Hence, this resulted in the fact that company is successful in managing its operations and improve performance of company. Aldi and Lidl financial performance Aldi is a supermarket chain in UK which is a large chain and competitor of Tesco. But Tesco is the largest supermarket chain in UK. By the analysis of sales of Aldi, it was analysed that there is increase in sales of the company by 7.3 % as compared to the earlier time period. During the past three years, the company has witnessed a growth in every quarter the average growth has not fell below 6.2 % in last ten years of data. On the other side, Lidl which is also a chain of supermarket based in UK reported a loss of £13.6 in the first year of their separate account for its GB operations. In addition to this loss after tax to Lidl GB invested is £654m in the year ending 29 February 2020. This in turn implies that Lidl was suffering from some of the issues and problem and because of this the company faced losses (Ejlerskov and et.al., 2018). SWOT analysis of Tesco This tool that is SWOT analysis is a tool for analysing the internal position of the company in order to know the fact that whether the company is performing the work in effective manner or not. Strength The main strength of the company is thatithasadiversifiedproduct presence covering a large geographical area. Anotherstrengthifthefinancial strengthofcompanywhichcan witnessed with help of listing over LSE and FTSE. In addition of this, new advances in packing techniques used by Tesco is also a good strength of company. Having a large number of qualified and skilledemployeesisalsoamajor Weakness The major weakness of the company is that it is facing a lot of controversies whichhasamajoreffectoverthe market position of company. Poor performance in specific market is also a major weakness of the company as this affects the sales of the company to a great extent (Fatricia, 2017).
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strength of the company. Opportunity Entering within the markets in which currently Tesco is not operating can an opportunityforthegrowthofthe company (Ejlerskov and et.al., 2018). In addition to this acquiring or merging withsmallcompaniescanassist companyinincreasingtheirmarket share. Threat The intense and high competition is the major threat which affects the working of Tesco (Elliott, 2019). Frequent changes within the need and preferencesofconsumersisalsoa major threat for the company. Recommendation for improvement to Tesco By referring to the above discussion it is very clear that for getting successful the most essential aspect is to analyse the market and its changes frequently. Hence, for this some of the recommended strategy for improving financial performance and market share are as follows- To invest high in marketing and sales promotion activities as this will attract large number of consumers. Hence, for this a major focus is being laid over use of digital marketing and other latest marketing technologies (Kolokotroni and et.al., 2019). In additionto this,effectivemarketresearchisalso agood recommendationfor improving the performance of company. The reason pertaining to the fact is that when continuousmarketresearchwillbeconductedthenthiswillassistcompanyin implementing these changes in operations of company and it will be liked by the consumers. CONCLUSION The above report summarised the fact that analysis of the business environment is very essential as this assist in taking effective decision for betterment of company. the above report analysed current trends like health lifestyle, use of digitisation and other. Further it analysed that since October 2015, Tesco was improving its performance. but on the other side, Aldi and Lidl were not having good performanceas comparedto Tesco. Further itwasanalysed that
diversified product range is the strength of company. on the other side, tapping the emerging market and economies is the major opportunity for company to grow.
REFERENCES Books and Journals Ejlerskov, K. T., and et.al., 2018. The nature of UK supermarkets’ policies on checkout food and associationswithhealthfulnessandtypeoffooddisplayed:cross-sectionalstudy. International Journal of Behavioral Nutrition and Physical Activity. 15(1). pp.1-10. Elliott, C., 2019. Tracking kids’ food: comparing the nutritional value and marketing appeals of child-targeted supermarket products over time. Nutrients. 11(8). p.1850. Fatricia,R.S.,2017.STRATEGICANALYSISOFTESCOSUPERMARKET.Jurnal Manajemen Terapan dan Keuangan. 6(2). pp.69-86. Kolokotroni, M., and et.al., 2019. Supermarket energy use in the UK. Energy Procedia. 161. pp.325-332. Online Five-yearrecord.2021.[Online].Availablethrough:< https://www.tescoplc.com/investors/reports-results-and-presentations/financial- performance/five-year-record/> Retailtrends2021.2021.[Online].Availablethrough:< https://www2.deloitte.com/uk/en/pages/consumer-business/articles/retail-trends.html>