Current Trends in Retail Industry: Analysis of Sainsbury's

This report discusses the current trends in the retail industry, with a focus on Sainsbury's. It analyzes the impact of technology, experimental retail, and customer loyalty on the company. The report also provides recommendations for Sainsbury's to stay competitive in the market.

Inquiry Based
Learning

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Current Trends in retail industry.................................................................................................3
Analysis of the organisation........................................................................................................5
Recommendations.......................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Retail industry is the business realm in which organisations meet for conducting buying
and selling activities in order to reach to the end customers and fulfil their needs and
requirements. Retailers works as the mediators between end consumers and wholesalers who sell
goods in bulk and retailers bridge the gap between them and customers by making sales to the
public (Ferreira, 2018). The report is developed on Sainsbury's, second largest retail supermarket
in United Kingdom. Sainsbury's was founded in 1869 and it is headquartered in London, UK.
The organisation deals in retail sector and offer goods and services to customers through their
supermarkets, hypermarket, forecourt shops and convenience shops. The report acknowledges
the current trends flourishing in retail sector and accordingly make analysis of company. At last
recommendations are provided in order to make changes in operations and indulge the company
in accordance to market requirements.
MAIN BODY
Current Trends in retail industry
Retail industry have gone through sever structural and managerial change in past few
decades. There are multiple factors which brought enormous fluctuations and evolution in retail
sector and that moved businesses to change and develop accordingly. Retail sector is the most
dynamic and modifying realm amongst all the other as the social trends are turning, causing
alteration in business practices and environment. The speed of change taking in retail industry is
unpredictable and as the rule says with change their comes huge challenges and opportunities
too. Retail industry in United Kingdom have gone through restructuring in large scale where jobs
are being lost, stores are getting closed and many other actions are being taken still online sales
are continuously growing and ratio is increasing.
Some of the retail trends which are flourishing and establishing in retail industry in UK
and according to which organisations are making developments are as follows:
 Digital commerce and Technology- Technology is at the heart of transforming and
modifying the retail landscape in United Kingdom. The growth and aggressive adaption
of digital tools and mobile technologies have caused multiple fundamental shift in social
trends and in the ways consumers shop and make their purchase decisions. The retailers
of all sizes and scope are affected with this new emerging trend in the retail sector that

automatically implies the impacts of it over Sainsbury's. The power dynamics have
changed and shifted in consumer favour, empowering them and rendering them huge
control over retail decision making and functions.
 Experimental Retail- As identified and explore the impact technology have over retail
and how people shop. Moreover, the purposes of brick and mortar retail have changes
too. The retailers are developing new ideas and identifying fresh ways to keep consumers
attracted towards their offerings and their respective brands. For instance, The Body Shop
experimented retail with a blend of relevance (Hemphill and Longstreet, 2016). The
company redecorated and changed its London street store into a concept store where they
offered refill stations and product stores and rendered more knowledge to consumers
about firm sustainability and other potential initiatives. This example clearly shows the
approaches adopted by organisation to offer new services and offering that keeps them
motivated and retained to the brand as the competition online can not be underestimated
and businesses have to take measures to deal in different manner and maintain a
competitive balance.
 Customer Loyalty- The research studies conducted and evidence gained clearly states
the increasing need for consumer to be loyal to the brand and multiple ways adopted by
marketers and business owners to keep people attracted and retain them for longer go.
Consumers can be easily flicked between loyalty schemes and offers depending upon the
offers made and benefits being provided to the customers. Shopping experiences and best
quality offering are must for keeping people with the brand for longer period of time and
to influence the customers buying behaviours and patterns. In recent years the trends and
statistics highlights the inducing competition and major retail efforts being made for
boosting and encouraging loyalty by buyers (Fiselier, 2016). For example, Morrisons a
competitor of Sainsbury's, teamed up with an market research company for gaining
personalised knowledge and provide personalised rewards and discounts to people
according to their interests and desires. Another example is of Tesco a leading
supermarket store in UK offers Clubcard Plus to consumers which enable buyers to save
on their purchase that is helpful in retaining them as well.
These are few current flourishing trends which are existing in retail sector and according
to which Sainsbury's and other competitive businesses are being running. Technology and digital

tools have major impact on the industry which is identified in past decades and that is going to
bring more revolutionary changes in the realm that is going to bring new opportunities for
businesses but they will be challenging as well. Therefore, business like Sainsbury needs to be
adaptable and flexible enough to changes and bring modifications accordingly for keeping their
market share intact and balance their competitive position (Hayes, Rahman and Islam, 2020).
Analysis of the organisation
External analysis of company is related with acknowledging the factors which are
existing in the surroundings of business and for whom company have to take measures to
mitigate their impacts as they are going to impose either positive or negative impact on the
company. The positive factors will be attached in way of opportunities and the challenges will be
holding negative influence over the firm. Retail industry trends are evaluated in above section
and in this segment a deep analysis will be conducted for knowing the external environment of
Sainsbury's for recommending required measures to manage the markets position.
PESTLE Analysis of Sainsbury's:
This is a model which has elements that exist in external environment of company and
hold overall impact on the whole industry bifurcating form positive to negative depending upon
the firm and their actions. The PESTLE analysis is an industry specific framework which is used
by business owners to gain knowledge about the market. The PESTLE analysis of Sainsbury's is
as follows:
PESTLE DESCRIPTION
Political/Legal The political and legal environment are aligned as the government makes
policies and regulation for specific industry and implement them for smooth
functioning of businesses and economy. The political impacts are negative as
the scenarios are changing after Brexit referendum. The laws related to taxes,
imports and exports are increased and new policies are developed who's
results are uncertain which is affecting the operations and specifically costs
structure of Sainsbury's.
Economic UK's economy is known to be the most stable and favourable one for
businesses and specially for domestic companies (Regy and Malini, 2018).
The economy is being affected by Brexit the economy is suffering fuel prices

are increasing which is resulting in higher costs for Sainsbury's as exports and
imports are becoming expensive.
Social The social factors refers to the customer base of company and their behaviours
of making purchases. The population of Sainsbury's are known to be loyal to
one brand but the entity have to make efforts for gaining customers loyalty
and maintaining it.
Technological Digital tools and technology has the most prominent impact over the retail
industry in past few decades and its will be bringing more changes,
opportunities and challenges for the realm. Sainsbury's offers online shopping
and home delivery options to consumers like other brands. Technological
element has positive impact and are still in initial stage of operations and new
developments still going to take place and emerge in market (Friedrich,
2020).
Environmental The firm Sainsbury's is working upon reducing its carbon footprint by
identifying new alternatives of working and developing more environmental
friendly operations and making up for ecological damage caused by their
operations in the society.
COMPETITIVE ANALYSIS
Porters Five Forces Model:
FIVE
FORCES
DESCRIPTION
Existing
rivalry
The existing rivalry force for Sainsbury's high as there are other large
organisations like Tesco and Walmart who are very competitive and
significantly becoming more and more competitive.
Bargaining
power of
customers
The consumer have high power as it is highlighted form trend analysis people
are empowered as switching cost is low and their control over the retail sector
is high (Evans and Kitchin, 2018).
Bargaining The suppliers bargaining power is competitively low as Sainsbury's is the

power of
suppliers
second largest supermarket of UK and have larger supplier base. Company do
not dependent on one single competitor.
Threat of
substitutes
The threat of substitutes is moderate as small discount retail stores are taking
over the market by offering similar goods in lower prices. But these stores do
not provide quality to people which offers them lower power over Sainsbury's.
Threats of new
entrant
The threat of new entrants is moderate as well because these stores are
entering the market by taking huge risks and also the barriers are huge which
is keeping them affected and do not render them power over firms as big and
diversified like Sainsbury's.
Recommendations
Sainsbury's is a retail supermarket dealing in United Kingdom only offering best quality
goods and services to the population of UK through their supermarkets, superstores, convenience
shops and forecourt shops. The company is knows as the second largest in whole UK market
competing with large international brands like Walmart and others. In the discussion conducted
above it is evident that retail industry is becoming more and more dynamic and Sainsbury's is
suffering and lacking in complying with the changing scenarios (Diddi and Niehm, 2016) .
Therefore, firm is recommended some solutions to the problems being faced and to manage their
competitive position and market share. These recommendations or suggestions are presented
underneath:
 Sainsbury's is a large supermarket but the company is not diversified, its operational area
is United Kingdom that is the firm only serve in its domestic market with around 1500
stores. The market of UK is saturated in which rivalry is highly is competitive and
aggressively increasing their competitiveness. Thus, it is suggested to Sainsbury's to
expand and diversify by increase their market share by expanding operations in new
locations and in marketplaces which are still developing and where customer's needs are
not satisfied efficiently by exiting firms. This will enable the firm to increase its presence
in international markets as well as company's customer base will increase rendering it a
competitive edge (Guyader, Ottosson and Witell, 2017).
 It is evident that technology and digital tools have significant impact over the retail
industry and over several field of the same business segment. Technologies are bringing

revolutionary changes in the economy and structural operations of retail sector. This
element offers one potential opportunity to Sainsbury's. The firm is recommended to
align technology and marketing for by developing according to experimental retail
practices. Basically Sainsbury's is suggested to integrate their marketing actions by
aligning both physical and online marketing practices by using Omni-channel marketing
tool. Through this technological advancements will be used for maximizing the efforts
made for making in order to keep consumers attracted and loyal to the brand (Romani
and et. al., 2018).
CONCLUSION
The above report is constructed on retail sector and trends that are being flourishing in
the industry that summarises the needs for company to develop and adopt measures according to
the changing business environment in order to be competitive. The industry trends are being
acknowledged and which clearly shows the influences technology have over the business
operations and on the consumers behaviours. It is stated that in United Kingdom retail sector is
being affected by huge restructuring and despite of it online sales were continuously increasing.
The companies were making efforts to maintain their market position and were practising
experimental retailing as well. Organisations analysis is conducted that showed the influence of
external environmental factors over the operations. The PESTLE and Porter's five forces modes
are used for the same which reflects upon the positive impact technological and economical
factors have over the business. Along with it increasing power of consumers are reflected too
with the study.

REFERENCES
Books and Journals
Diddi, S. and Niehm, L. S., 2016. Corporate social responsibility in the retail apparel context:
Exploring consumers' personal and normative influences on patronage
intentions. Journal of Marketing Channels. 23(1-2). pp.60-76.
Evans, L. and Kitchin, R., 2018. A smart place to work? Big data systems, labour, control and
modern retail stores. New Technology, Work and Employment. 33(1). pp.44-57.
Ferreira, J., 2018. Fostering sustainable behaviour in retail: Looking beyond the coffee
cup. Social Business. 8(1). pp.21-28.
Fiselier, B. T., 2016. What are current coopetition practices in the Dutch retail industry and how
do they differ from less competitive industries? (Bachelor's thesis, University of
Twente).
Friedrich, D., 2020. How regulatory measures towards biobased packaging influence the
strategic behaviour of the retail industry: A microempirical study. Journal of Cleaner
Production, p.121128.
Guyader, H., Ottosson, M. and Witell, L., 2017. You can't buy what you can't see: Retailer
practices to increase the green premium. Journal of Retailing and Consumer Services.
34. pp.319-325.
Hayes, J., Rahman, A. and Islam, M. R., 2020. Shaping the Future of Multidimensional Project
Management in Retail Industry Using Statistical and Big-Data Theories. In Statistics for
Data Science and Policy Analysis (pp. 347-360). Springer, Singapore.
Hemphill, T. A. and Longstreet, P., 2016. Financial data breaches in the US retail economy:
Restoring confidence in information technology security standards. Technology in
Society. 44. pp.30-38.
Regy, J. and Malini, D. H., 2018. High Performance Work Practices of Select Apparel
Manufacturing and Retail Companies in Bangalore. Sumedha Journal of
Management. 7(4). pp.15-26.
Romani, S. and et. al., 2018. Domestic food practices: A study of food management behaviors
and the role of food preparation planning in reducing waste. Appetite. 121. pp.215-227.
Online:
Top retail trends to expect in the roaring, 2020. [Online] Available Through:
<https://www.retailgazette.co.uk/blog/2020/01/top-retail-trends-to-expect-in-the-
roaring-2020s/>