Pestle Analysis of Sainsbury’s and Key Drivers of Change

This report provides a Pestle analysis of Sainsbury’s and identifies the key drivers of change that the management should consider. It discusses the political and environmental factors affecting Sainsbury’s and suggests adopting new technologies and becoming more environmentally friendly.

Global Business
Environment

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4
Appendix..........................................................................................................................................4

INTRODUCTION
In the report light will be put upon the pestle analysis of Sainsbury’s and the key drivers of
change that the management should be taking. The report will going to achieve external
environment analysis and for that Sainsbury’s is taken as the case organization.
MAIN BODY
PESTLE analysis of Sainsbury’s
Pestle analysis is the tool and framework to analyse and monitor the key factor that
influence the external environment on the organisation (Perera, 2017). The following is the
pestle analysis of Sainsbury’s.
Political factor
The political factor of Sainsbury’s has impacted very severely as UK took decision to
leave European union and it would make more difficulty for Sainsbury’s to affordably import
products from abroad. As cost will be increased and burden will be passed on to consumer
(Vallati. and Grassi, 2019).
Environmental factor
The responsibility of every organisation operating has a responsibility towards the
environment in which they are operating as Sainsbury’s also contributing in the emission of
carbon dioxide. So it is the responsibility of this supermarket to become more environmental
friendly and minimize the ecological damage (Nandonde, 2019).
Key drivers of change that management should take into notice.
Some key drivers of change that the management should be taking notice in their
deliberations for the future direction of the firm are:
Political factor – Management of Sainsbury’s should take political uncertainty over
Brexit as a key driver of change because of this uncertainty customers are holding back and not
spending and buying from Sainsbury’s and due to this profits are going down. Products like
meat, fish and dairy items will be reduced because of Brexit which means proportion of products
coming in Northern Ireland from Britain needs to be checked (Clarke. and et.al., 2017). As
compared to Sainsbury’s competitors it has been bearish in case of Brexit. Above all these

uncertainties also Sainsbury’s is currently performing very great and is among the big four
supermarket. They also adopted price lockdown strategy which means lowering prices on meat
and fresh produce. UK former prime minister campaigned to remain in European Union and
many leaders resigned due to this reason. UK parliament also forced the government to seek
extension of the deadline.
Environmental factor – Covid is the most influential environmental factor and
Sainsbury’s should take this key driver into concern. Due to Covid there was a proper lockdown
and there was a panic buying by the customers which lead to empty shelves. This also led to
increased pressure on supply chain. This situation also led to staff shortage as employees self-
isolated themselves because of Covid fear and business was interrupted. The demand for general
merchandise and clothing is weak. It has also add on to the cost as they have to maintain their
employees and staff (Power. and et.al., 2020). Sainsbury’s responded to this situation in a very
healthy way they lowered the prices of grocery products, fresh produce like apples, mangoes and
other food. Government is playing a major role in Covid for supermarkets as they are providing
relaxation to them and encouraging them to join hands together to feed the nation and make
supply easily available. They also announced some measures in which supermarket can work
together without infringing completion law. They also announced new order to share data with
each other related to stock levels.
Some more key drivers of change that management should take into consideration
Sainsbury’s should adopt new and advanced technologies to improve customer experience.
They should also identify and implement new ways to become more environmentally friendly
and consider how they can minimize the ecological damage caused by their operations. This
would build trust among the customer and society.
The supermarket should listen to the customers’ needs and frustration, research the technology
marketplace carefully and pilot the solution before large scale implementations. They can
implement coupon-at-till printer combine it with Nectar data and provide customers with
personalized offer to help customers live well for less.

CONCLUSION
It can be concluded that there are various macro factors like political, economic, social,
technological, environmental and legal that impact on the Sainsbury’s operating environment and
there are various drivers of change that the management takes notice like technological
advancement, going environmental friendly etc.

REFERENCES
Perera, R.( 2017 )The PESTLE analysis. Nerdynaut.
Shtal, T. and et.al,(2018)Methods of analysis of the external environment of business activities.
Bentham, J (2018) Business and Economics in the News–Sainsbury's and Asda-the decade's
mega-merger. Teaching Business & Economics. 22(3). pp.11-12.
Nandonde, F.A. (2019) A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.
Vallati, M. and Grassi, A (2019) July. AI to Facilitate Legal Analysis in the PESTLE Context. In
The EMerging Technology conference (EMiT) 2019 (pp. 66-68). IET.
Clarke, H.D. and et.al., 2017. Brexit. Cambridge University Press.
Power, M. and et.al., 2020. How COVID-19 has exposed inequalities in the UK food system:
The case of UK food and poverty. Emerald Open Research, 2.
Thiele, A., 2018. PESTEL Analysis- What is it and why do we use it?. [Online], accessed
through<https://andet5.com/2018/02/pestel-analysis-what-is-it-and-why-do-we-use-it/>

Appendix
Figure 1pestel analysis
Source : PESTEL Analysis- What is it and why do we use it, 2018
Economic
Rising costs of fuels make it expensive to transport goods and will lead to lower profit
margins. Also, rising salary expectations of the workers and paying them more will add on to the
expenses of Sainsbury’s. Fierce competition is also a factor that influences Sainsbury’s and
forces them to innovate (Shtal. and et.al, 2018).
Social factor
The trend of healthy eating has also forced Sainsbury’s to adapt to the consumer demands
for the long-term success. Also, consumers are becoming conscious of the source of their food
therefore it also enhanced Fairtrade movement.
Technological factor

Technology advances like use of big data and artificial intelligence allow Sainsbury’s to
know if their products are expected to sell and at what price. The trend of online shopping has
also given Sainsbury’s an advantage of capturing large customers (Bentham, 2018).
Legal factor
There are some legal laws that influences the working of Sainsbury’s like employment
law, discrimination law, health and safety law etc. While making policies Sainsbury’s must
adhere to these laws.

8