Factors Affecting the Supermarket Industry: Tesco Presentation

This presentation discusses the factors affecting the supermarket industry, with a focus on Tesco. It covers recent technological developments, globalization, environmental factors, and legal factors. It also includes current trends in the UK supermarket industry and an interpretation of market share data. Additionally, it provides a brief performance analysis of Tesco, a SWOT analysis, and financial performance analysis of Aldi and Lidl. The presentation concludes with recommendations for Tesco's improved performance.

Present challenge based on Tesco
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Factors affecting the industry
Super market industry
Recent technological developments:
• Online retail market expected to
increase 68 percent over next 5 years.
• Online shopping has introduced new
business model such as convenience
stores, Delivery stores and website.
Legal factors:
• Have to comply with provisions of
various statutory bodies such as:
o Antitrust law,
o Food safety act,
o Capital market laws,
o Environmental laws
Globalization:
 Entry of Foreign industries with huge
fund outlay and advanced technology.
 Decrease in market share
 Threat for small local players of
industry
Environmental factors:
• Treatment of solid wastes,
• Recycling of unsold products,
• Application of environmental
laws and regulations.

CURRENT TRENDS IN UK
SUPERMARKET
 Technology transforming the E-commerce,
 Physical stores becoming Digital stores,
 Personalized experiences,
 The rise of Social commerce,
 Technological development in supply chain management.
 Traceability and data management

MARKET SHARE
DISTRIBUTION
Tesco
Sainsbury's
Asda Morrisons Aldi Co-op Lidl Waitrose Iceland
0%
5%
10%
15%
20%
25%
30%
MARKET SHARE
MARKET SHARE

Interpretation of Market share
data
 TESCO has dominating market share as compared to others.
 Sanbury is holding 2nd position in terms of market share holding for past three years.
 TESCO has followed merger & acquisition strategy to expand its market share.
 ALDI has managed to reach at 5th position through use of proper marketing strategy.
 LIDL has incurred losses for past 5 years but still it is the 6th largest market share holder in the UK
super market industry.

BRIEF PERFORMANCE ANALYSIS OF
TESCO
PAT
2018 2017 2016
2018 2017 2016
Income before tax 1,298,000 145,000 202,000
Income tax expense 306,000 87,000 -54,000
Net income from continuing ops 992,000 58,000 256,000

SWOT ANALYSIS OF TESCO
• Marketing strategy,
• Supply chain,
• Huge capital outlay,
• Brand name,
• Workforce strength,
• Research & development
STRENTHS WEAKNESSES
• Product quality,
• Geographical segment,
• Higher employee cost,
• Cost associated with
treatment of wastes and
scrap.

• Customer loyalty,
• Barriers to entry,
• Low cost product,
• Development in Digital market
place,
OPPORUNITIES THREATS
• Threat of new entrants,
• Legislative provisions,
• Fall in price of the
product,
• Technological
development in product
features.
SWOT ANALYSIS OF TESCO

FINANCIAL PERFORMANCE ANALYSIS OF ALDI
2017 2016 2015
Profit before tax -1,207.78 -4,361.76 1,479.13
Income Tax Expense 1.775 162.809 87.181
PAT -1,209.55 -4,524.57 1,391.95
PAT
2017 2016 2015

Interpretation of Chart
 Chart shows that the company has incurred huge losses in the year 2016 from
positive result of 1471.6 millions to loss to the tune of 4361.7 millions.
 It has also recovered from losses in the year 2017 by incurring a loss as compared
to the year 2016.
 The company has implemented different cost reduction techniques and some other
proactive measures to prevent losses.

FINANCIAL PERFORMANCE ANALYSIS
OF LIDI
2017 2016 2015
Profit before tax 4206.43 4,561.76 3,479.13
Income Tax Expense 861.79 962.809 687.181
PAT 3344.64 3598.951 2791.949
PAT
2017 2016 2015

Interpretation of the chart
 The result shows that the company’s performance is profitable through out the
years of operation.
 A negative trend in profit from the year 2016 to 2017 shows that the company
state of affairs has not been managed in proper way resulting into a decline in
overall profit and sales.
 Major causes of such decrease in profit may be the result of increase cost or
decrease in sales value or less proactive managerial approach.

COONCLUSION AND
RECOMMEDATION.
From the above data, it can be concluded that the TESCO’s performance in the retail
market is improved and the reasons for such performance improvement is achieved due to
following reasons:
 Efficient marketing policies,
 Royalty schemes for attracting new customers,
 Merger & acquisitions strategy adopted by the company
 Improved after sale service,
 huge product portfolio.

Bibliography
1. Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management, 44, pp.194-203.
2. Gürel, E. and Tat, M., 2017. Swot Analysis: A Theoretical Review. Journal of International
Social Research, 10(51).
3. Pickles, J., Barrientos, S. and Knorringa, P., 2016. New end markets, supermarket expansion
and shifting social standards. Environment and Planning A: Economy and Space, 48(7),
pp.1284-1301.
4. Orlitzky, M., Schmidt, F.L. and Rynes, S.L., 2003. Corporate social and financial performance:
A meta-analysis. Organization studies, 24(3), pp.403-441.
5. Higgins, R.C. and Reimers, M., 1995. Analysis for financial management (No. s 53). Chicago:
Irwin.
6. Tesco plc. 2019. Tesco PLC. [online] Available at: https://www.tescoplc.com/ [Accessed 23
Mar. 2019].