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Analysis of Supermarket Industry and Economic Data

   

Added on  2020-10-22

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ECONOMICS FORBUSINESS
Analysis of Supermarket Industry and Economic Data_1

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................11. Description of company and industry.................................................................................1Overview of Westfarmers Limited.........................................................................................1Overview of industry..............................................................................................................12. Analysis of market structure the industry...........................................................................2Type of market structures (Supermarkets: Grocery products)...............................................2Market leader in industry........................................................................................................33. Determinants of demand and supply which are highly influential.....................................4Determinants of demand.........................................................................................................4Determinants of supply...........................................................................................................54. Demand elasticity of product .............................................................................................5Product or service is elastic or inelastic.................................................................................5Factors which impact elasticity of demand of production......................................................65. Analysis of recent event with substantial impact on industry............................................6Description about event..........................................................................................................6Impact of event on market demand and supply......................................................................7Likely impact of event on quantity and market price.............................................................7CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
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INTRODUCTIONEconomics is referred as social science which is directly concerned with distribution,production and consumption of services and goods. It helps in gaining information related to thathow individuals, nations, government and businesses makes choices for resource allocation forsatisfying needs and wants and it also identifies that how groups coordinate and organize effortsfor attaining huge output. The present report will discuss about Westfarmers Limited's strategy innext 5 years along with overview of company and industry. This will analyse the marketstructure and its market leader in this industry. In the same series, it will discuss aboutdeterminants of supply and demand for service and products which are highly influential.Simultaneously, there will be discussion related to demand elasticity of product and services andall considered factors. The most important concern is related to analysis of recent event alongwith its substantial impact on industry.1. Description of company and industryOverview of Westfarmers LimitedWestfarmers Limited is headquartered in Perth, Australia and founded in year 1914. It isinvolved in retail, production, coal mining, distribution, gas processing, manufacturing chemicalsand fertilisers, investment business along with industrial and safety product distribution inAustralia, New Zealand, United Kingdom and at global level. The business unit operates 809Coles supermarkets, 899 liquor stores with context of First Choice Liquor brands. It also has 88hotels and approx 711 convenience outlets and online supermarket (Pulker and et.al., 2018).Further, it offers car, home and landlord insurance products along with credit cards, outdoorliving products via warehouse stores, trade centres, smaller format stores along frame and trustsites and online under bunnings name; home wares, general merchandise and apparel via 303target stores. Aggregately, business unit supplies building materials, manufactures and suppliesammonia, retails office and technology products, ammonium nitrates, wood plastic compositedecking and screening products and distributes LNG and LPG. Generally, it supplies industrialsupplies along with safety products, by managing risk and compliance services and offeringcorporate and industrial workwear (Annual report of Westfarmers, 2019).Overview of industryThe food and grocery sector of Australia is in intense pressure through various range offorces such as competitive nature of supermarket retail sector. This industry had maintained1
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momentum driven through social and economic developments. There are key factors withcontext of growth in retailing industry such as increasing purchasing power and population alongwith robust economic growth. Over year 2013 to 2018, retail industry in Australia region wouldexpand at 2% CAGR whereas growth of retail industry in Australia within Asia pacific is secondlowest (Grimmer, 2018). Retailing has faced modest growth as it has experienced positiveperformance and here Westfarmers is the largest retailer in Australia in year 2017, leading invarious retail channels. The sales growth of organization is highly driven through strongperformance in channel like home and garden expertise, mass merchandisers and office supplystores. The total revenue of retailing industry is $565.1 BN and its present growth over 2012 to2017 is about 1% where its growth forecast from 2017 to 2022 is till 1.4%. With context of employment is about 1921027 with -0.5% growth.In year 2007, therewas acquisition of Cole group in a $22 billion on market takeover when private equity firmswere directly mulling with purchase of organization. In the same series, retail sales in Australiahas raised with 3.60% in similar month of its previous year. It has averaged 5.75% from year1983 to 2018 and reaching at high with 12.70% in 1985 October and traced low of 13.90% in2017 October. The overall GDP of Australia is 1.315 trillion with growth of 0.6% with 1228400employees and contributing 10.1% of GDP (Australia GDP, 2019).2. Analysis of market structure the industryType of market structures (Supermarkets: Grocery products)The Australian retail sector is contributing as strength of economy of Australia alongwith giving the best quality services, consumers safeguard and goods to Australians. The presentstructure of retail industry could be elaborated as fragmented where no enterprise has hugemarket share with capability for influencing direction of industry. With perspective of activetraders, it consists of department stores, micro sellers, SMEs, high street stores, e-tailers andsellers at local markets (Indounas, 2018). This sector is fragmented and could be more worsenwith innovative technologies and use of internet which will allows new retailers in market withtoo much ease.By considering the above fragmented structure, Australian grocery retailing industry isoligopolistic with its nature. Further, market structure is featured through small number ofbusiness unit as they possess with context of significant degree of economic influence along withmarket power. Westfarmers Limited is wholly owned but might comprises number of store2
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