Retail Trends in the UK: A Case Study of Tesco

This project report explores the retail trends in the UK and their impact on Tesco, one of the largest retail organizations. It discusses the use of robotics, artificial intelligence, and chat bots in the retail industry. The report also includes a SWOT and PESTLE analysis of Tesco and provides recommendations for improving its performance.

Inquiry Project

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Retail trends.................................................................................................................................1
Analysis of organization..............................................................................................................2
Recommendations........................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Retail industry is mainly involved in the supplying of goods and services to the customers
according to their requirements. It is one of the largest industries which are contributing in GDP
of United Kingdom (Alvarez, McLoughlin and Shelman, 2014). The organization which is
selected for this report is Tesco which is one of the largest entities in retail sector. It is a chain of
British Multinational supermarkets. This assignment covers various topics such as retail industry
trends, back group of entity, SWOT and PESTLE of organization. Apart from this,
recommendations and action plan for future is also covered in this project.
MAIN BODY
Retail trends
Retail industry is involved in supplying goods and services to the customers with the help
of different types of channels for the purpose of generating profits. Main aim of retailers is to
make sure that all the demands of customers are fulfilled with the help of supply chain
management. In order to gather information about basic needs of customers retailers conduct
market research and then they offer products accordingly. Retail industry is very big and it is
contributing a huge amount in economic growth of UK (Contribution of Retail in UK’s
Economy, 2020). In year 2018 it generated sales around 381 billion pounds which is a very high
amount and it helped the economy to grow faster. It is also generating around 10.5%
employment in South West of England. There are various trends that are introduced in retail
industry and should be focused by all the entities that are operating business under it. Description
of all of them is as follows:
Robotics: It is the latest trend of retail industry in which supermarkets are using robots as
the customer assistants which help them to improve performance of business. With the help of it,
retailers can enhance efficiency of executing business because there will be no specific working
hours of employees. The cost which is associated with this trend is very high therefore only large
entities can take advantage from it. Main advantage of it to the organizations is higher profits
because they will be able to improve performance with the help of it. Robots can help the
customers to get detailed information about the product that they are willing to buy. Ignorance
of this trend may affect efficiency of retailers that are currently operating business under retail
sector (Coe, Lee and Wood, 2017).
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Artificial intelligence: It is a latest technology which is facilitating the businesses to
automating all their processes so that the time involved in them could be saved. This trend is
facilitating all the retail organizations to carry out changes in their delivery as well as customer
attending or handling procedures by using machines. This trend should be focused by all the
entities of retail industry so that they can reduce the customer waiting time at the counters. It will
help to reduce the number of cues in supermarkets as there will be automatic machines which
could be used by clients to get a bill of their items. By adopting it retailers will be able to satisfy
all the needs of customers as they will get all the goods that they want and they will not have to
wait for so long for billing at cash counters (Sansone and Colamatteo, 2017).
Chat bots: This the current and very famous trend in retail industry which is attracting
large number of customers. It is a small dialogue box which is added by retailers at their website
where consumers can ask for the items that are required by them. The main thing which has
emerged recently in this trend is these are not handled by computers but humans so that exact
answers to the questions of customers could be provided (Evans and Mason, 2018). By using it
retail sector companies will be able to perform all their operations properly and attract new
clients. With the help of it, the time which is spent by customers while looking for the items that
are required by them and they don’t get it. Chat bots will allow them to ask the retailer that they
are having that specific item and the price so that they can directly order it from website or get
from physical store if supermarket is not delivering in this area.
Analysis of organization
Back ground of Tesco: Tesco is one of the largest organizations of retail industry of
United Kingdom. It is a British multinational supermarket chain which is mainly based in
Walwyn Garden City, Hertfordshire, UK. It was founded by Jack Cohen in year 1919 in London,
England. Different products that are sold by it are supermarket, hypermarket, super store and
convenience shop. There are various subsidiaries of it which are Tesco Store Ltd, Bank, Mobile,
Family Dining, Booker Group, Jack’s, Dummhumby etc. It is the third largest retailer of world
according to its revenues (Overview of Tesco, 2020).
SWOT analysis of Tesco: It is one of the main strategic tools which are used by
companies to determine their actual strengths, weaknesses, opportunities and threats. SWOT
analysis of Tesco is as follows:
Strengths Weaknesses
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 Market image of Tesco is very good
which helps it to attract large number of
customers.
 Quality of all the products sold by
Tesco is good which is beneficial for
the entity to sustain in the market
(Bodolica, Spraggon and Soueid, 2019).
 Profitability of Tesco is not
managed properly which results in
lack of liquidity.
 The revenues of Tesco are
dependent upon UK market.
Opportunities Threats
 Tesco can expand business in such
locations where it is not operating yet to
capture large market.
 It can introduce health and beauty
products in the market to attract new
clients (Fernie and Sparks, 2018).
 Level of competition in the retail
industry is very high which may
affect market share of Tesco. Major
competitors of it are Sainsbury,
ALDI, LIDL etc.
 Governmental restrictions in retail
are increasing which may affect
Tesco in future.
PESTLE analysis of Tesco: It is one of the tools which are used by companies for analysing
external environment. There are various elements of it which are political, economic, social,
technological, legal and environmental (von Briel, 2018). Discussion of all of them in context of
Tesco is as follows:
Political Economic
 Political instability of UK is affecting
business execution of Tesco as it results
in unstable business growth.
 In UK trade restrictions for large and
profitable companies are not tough
which help Tesco to perform operation
smoothly.
 The level of economic growth of UK is
high which helps Tesco to develop the
business effectively.
 The management of Tesco keeps
detailed information of fluctuation of
inflation or deflation so that they can
control the purchasing power of
customers (Haddock-Millar and Rigby,
2015).
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Social Technological
 Customer’s preferences and tastes
changes with time and Tesco offer them
products accordingly which helps it to
satisfy their needs.
 Tesco analyses culture of all the
countries where it operates business so
that it can provide products to the
clients according to tehri requirements.
 Tesco paying attention towards
development of technology and us it in
advertisement which help it to reach the
large number of customers.
 Tesco is also use latest technologies
such as chat bots so that all the queries
of customers could be resolved
properly and they could be retained for
long period in future.
Legal Environmental
 There are various types of laws such as
health and safety, employment, etc.
which should be complied by Tesco to
operate business properly.
 Governmental party’s regulations
changes with time and for Tesco it is
very difficult to modify its policies
accordingly. It leaves negative impact
upon business because in this situation
governmental parties may take strict
action (Peeroo, Samy and Jones, 2015).
 In order to operate business
systematically Tesco take part in
corporate social responsibility activities
that helps it to establish positive market
image.
 Tesco is also taking part in animal
welfare activities which is also
beneficial for it to establish positive
market image.
Recommendations
Tesco is a large organization which is operating business all around the world therefore it
should pay attention towards some specific recommendations to improve its performance. Some
of the suggestions that are made to the entity are as follows:
 Tesco should use robots as customer assistants in the supermarkets as it will help it to
resolve all the queries of consumers who are visiting the store. On the other hand, it will
also create brand loyalty for the enterprise because when all the queries of patronages
will be resolved then it will leave a positive impact upon their mind set (Bamfield, 2018).
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 Another recommendation which is made to Tesco is to use artificial intelligence which is
very important for it. The customer foot fall in stores of the entity is huge and it results in
high waiting time for the clients. By paying attention towards artificial intelligence the
entity can establish new machines at the cash counters. With the help of the, clients can
make their own bill and it will help to reduce their stress level along with waiting time. It
will be beneficial for Tesco to enhance its performance and efficiency to execute business
(Sparks, 2014).
 Tesco should also use chat bots will human assistants as it will help the customers to
directly interact with staff. In order to attract new clients, it is very important for Tesco to
make sure that it is satisfying all its existing customers. By using chat bots, it will provide
answers of all the questions of buyers and inspire them to visit the stores and buy the
items that are required by them (Nair, 2019).
Tesco should focus upon all the above recommendations as it will help the organizations
to grow the business and carry out operations systematically. By using latest trends Tesco will
able to attain its long-term goals such as higher profits profitability, satisfied customers and
positive market image. The action plan which could be focused for incorporating the
recommendations is as follows:
Step 1- Conducting market research: It is the first stage where Tesco’s managers will
conduct market research to analyze the trends that are emerging in the market. For this purpose,
research and development department will perform different activities so that all the trends could
be identified.
Step 2- Analyzing emerging trends: It is the second stage of action plan where the staff
of research and development department of Tesco will be responsible to analyze all the identified
trends. Here, effectiveness of all of the will be determined so that some of them could be selected
to implement (Lim, 2020).
Step 3- Evaluating all the trends: At this stage, Tesco’s managers will evaluate all the
analyzed trends for the purpose of selecting the best of them. It is not compulsory that only one
is required to be selected multiple trends could be focused if they are able to provide growth to
business.
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Step 4- Implementing the best suitable: This stage is related to the implementation of
trends. Here, Tesco will implement different emerging trends such as Chat Bots, Artificial
Intelligence, Robotics etc. according to its choice (Vu, 2016).
Step 5- Analyzing impact of trends: It is the last step of action plan in which
implemented trends will be analyzed by staff members of Tesco so that it could be determined
that they are impacting positively or negatively.
While planning to implement the action plan all the above described steps are required to
be focused by Tesco. With the help of it, the organisation will be able to reach the long-term
business goals such as higher profits, large market share, increased number of customers etc.
While implementing the action plan it is very important for the managers to make sure that they
follow each and every step properly as it will help them to attain success and accomplish all the
difficult tasks successfully. If all of them are focused step by step them the targeted goals could
be achieved.
CONCLUSION
From the above project report it has been concluded that retail industry is involved in buying
and selling to goods so that all of them could be supplied to the customers according to their
requirements. For all the retail sector organizations it is very important to make sure that they are
having detailed information of all the emerging trends in the industry. Some of them are artificial
intelligence, robotics, chat bots, etc. By paying attention towards all of them retail sector entities
will be able to attain growth. There are various tools and techniques which could be used to
analyze actual position of company. These SWOT and PESTLE analysis.
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REFERENCES
Books and journals:
Alvarez, J. B., McLoughlin, D.P. and Shelman, M., 2014. Tesco Group Food.
Bamfield, J., 2018. International trends in retail crime and prevention practices. In Retail
Crime (pp. 33-53). Palgrave Macmillan, Cham.
Bodolica, V., Spraggon, M. and Soueid, M. A., 2019. Innovation drivers and trends in the retail
industry: an application to emerging markets and the case of the Gulf
region. International Journal of Comparative Management. 2(1). pp.51-66.
Coe, N. M., Lee, Y. S. and Wood, S., 2017. Conceptualising contemporary retail divestment:
Tesco's departure from South Korea. Environment and Planning A: Economy and
Space. 49(12). pp.2739-2761.
Evans, B. and Mason, R., 2018. The lean supply chain: managing the challenge at Tesco. Kogan
Page Publishers.
Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Haddock-Millar, J. and Rigby, C., 2015. Business Strategy and the Environment: Tesco PLC’s
Declining Financial Performance and Underlying Issues. Review of Business & Finance
Studies. 6(3). pp.91-103.
Lim, S., 2020. Retail management.
Nair, K. S., 2019. Paradigm shifts in Indian retail-trends and prospects. International Journal of
Indian Culture and Business Management. 18(4). pp.518-529.
Peeroo, S., Samy, M. and Jones, B., 2015, December. Customer engagement manifestations on
Facebook pages of Tesco and Walmart. In 2015 International conference on computing,
communication and security (ICCCS) (pp. 1-8). IEEE.
Sansone, M. and Colamatteo, A., 2017. Trends and dynamics in retail industry: focus on
relational proximity. International Business Research. 10(2). pp.169-179.
Sparks, L., 2014. 07 tesco’s supply chain management. Logistics and retail management:
Emerging issues and new challenges in the retail supply chain, p.149.
von Briel, F., 2018. The future of omnichannel retail: A four-stage Delphi study. Technological
Forecasting and Social Change. 132. pp.217-229.
Vu, M., 2016. IS THE BALANCED SCORECARD USEFUL IN A COMPETITIVE
INDUSTRY?: Using Tesco PLC as a case study in the UK grocery retail industry.
Online
Overview of Tesco. 2020. [Online]. Available through:
< https://www.tesco.com/ >
Contribution of Retail in UK’s Economy. 2020. [Online]. Available through:
< https://www.retaileconomics.co.uk/library-retail-stats-and-facts >
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