Industry Analysis of UK Supermarket Industry

INDUSTRY ANALYSIS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Environmental analysis of industry by using PESTLE as strategy tool......................................3
Porter 5 forces analysis...............................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Industry analysis is a function of business, provide information about current business
environment, it helps to comprehend different economic pieces of marketplace and how these
may be utilized to gain competitive advantages. The current report is based on supermarket
industry, UK. PESTLE analysis and porter's five force model will be defined in this study in
context of chosen sector.
MAIN BODY
Environmental analysis of industry by using PESTLE as strategy tool
Political factor-
Political instability and stability, changes in tax as well as trade policies are considered as
political factor, that affect every sector or industry in the world. The profitability and revenue of
UK supermarket industry get affected by government policies. The possibility of UK leaving
European union, is an example of political factor that directly impact on UK supermarket
sector, it put negative effect upon sector since leaving EU also mean leaving trade zone (Garg,
2019). All the nations currently importing products to UK to be sold in supermarkets could
become more reluctant to sell their goods in nation due to tariff. It is one of the most essential
problem for this industry that directly impact on productivity and profit margin negatively.
Another political issues is possibility of Scotland becoming independent, it can lead to
problem with supply chain, added administrator costs and pension law that can be required
would outcome in higher prices for target market. Independence of this nation can increase
prices that impact on supermarket industry profit margin, it loss in profit for them.
Economic factor-
The unemployment rate of UK impact on supermarket industry, while considering at the
most recent period there is a little drip in 2009 reflecting effects of global financial crisis on
employment in nation (Vidal, 2016). However, it also reflects gradual recovery of UK economy
with employment rate rising again up to 72.1 percent, just one percent short of extreme
percentage every reached. So it can be said that unemployment rate impact on UK supermarket
industry because it directly influences consumer spending and buying behaviour. Economic
situation after Brexit arise unemployment rate which in turn affects customers purchasing and
spending nature which then has an affect supermarket sector. It considered as another issue faced
by this industry after Brexit. This issue lead as threat for industry at short term period.