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Price War among UK Supermarkets and Its Impact on Business : Report
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Added on 2020-01-21
Price War among UK Supermarkets and Its Impact on Business : Report
Added on 2020-01-21
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Page1AN ANALYSIS OF PRICE WAR AMONG UKSUPERMARKETS AND ITS IMPACT ON BUSINESSPRACTICES AND CUSTOMER LOYALTY.Dissertation submitted in partial fulfilment for the award of Msc Marketingat the University of Ulster, London
DECLARATION-------------------------I hereby declare that, with effect from the date on which this dissertation is deposited in thelibrary or other department / school / faculty of the University of Ulster, I permit thedissertation to be copied in whole or in parts without reference to myself, in theunderstanding that such authority applies to single copies made for studying purposes andwhich are not published. An additional condition is that the acknowledgement is credited tothe actual source.This restriction does not apply to the copying or publication of the title, abstract orintroduction to this dissertation. It is a condition that anyone who consults this dissertationmust recognize that the copyright rests with the author and no quotation from thedissertation or information derived from it may be published unless the source is properlyacknowledged. Signed ............................................................. Date : 2 | P a g e
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ACKNOWLEDGEMENTI would like to thank all those individuals who have supported me in conducting the presentresearch and arrive at a valid conclusion. First of all, I would like to thank my supervisor forgiving me an opportunity to carry out the present research. Apart from this, I am thankful tomy friends and family members who have supported me at the time of data collection andanalysis as without their support it was not possible to carry out the entire research andaccomplish its aim. 4 | P a g e
ABSTRACTPrice wars are the facts of the today’s retail industries. The main purpose behindcarrying out the present research is to analyze the impact of existing price war among theretail supermarket industry of the UK . This paper will seek to understand on how the thediscount retailers like Aldi and Lidl have initiated price war and how it has effected the giantretailers like Asda and Tesco business operations. The report focuses on conducting theresearch through the medium of primary and secondary research. It was assessed that therehas been a huge shift in the industry, a change in the customer’s mind and developments inthe market, which has basically led to increase/decrease in the sale of the few specific brandsin the UK supermarket industry. It was further noticed that the entry of few German based discounted retailers, suchas Lidl and Aldi has also exaggerated the whole supermarket industry of the nation andaffected Tesco and ASDA. So, the present study investigates regarding in terms of how sales,profits and other associated segments of ASDA and Tesco has been affected due to thesefactors and how it have effected the customers buying behaviour or loyalty. For the purposeof carrying out the present study, the data have been collected from the managers of Tescoand Asda through purposive sampling method. Apart from this, the quantitative technique ofdata analysis has been used to depict the results of the study. It was concluded post study that there are the few areas like employees, suppliers,customers, sales, profits and market share, which has been adversely affected due to thesituation of price wars. Also, it was suggested that Asda and Tesco should work and makeefforts to create innovative products and services and for sustaining well in the highlycompetitive marketplace to retain the loyal customers. Improving the price image withoutdoing much harm to th product quality and services and focusing on savings for customerswill help in sustainable profit and to fight the ongoing price war. 5 | P a g e
Table of ContentsACKNOWLEDGEMENT3Chapter 1- Introduction61.1 Background of the study71.2 Rationale of the study91.3 Research Aim, objectives and questions111.4 Potential significance & Importance of the study111.5 Analysis and framework121.6 Structure of the dissertation13Chapter 2- Literature review152.1 Concept of price wars152.2 Importance of Customer Loyalty172.3 Managing Customer Relationship202.4 Impact of price wars on customer loyalty212.5 The concept of retail marketing mix232.6 Impact of German discount retailer on Asda and Tesco242.7 Analyzing retailer pricing strategy252.8 Impact of price wars on staff262.9 Impact of price wars on customers spending272.10 The future of discount retailers282.11 Industry Analysis & Industry Trends29Chapter 3 Research Methodology313.1 Introduction313.2 Research design313.3 Research Philosophy:323.4 Research Approach333.5 Data Collection343.6 Data Analysis353.7 Sampling36Chapter 4-Data analysis376 | P a g e
4.1 Introduction374.2 Data analysis of Asda374.3 Data analysis: Tesco56Chapter 5- Conclusion and recommendation655.1 Conclusion655.2 Limitation of the study685.3 Recommendations69References72Books and Journals72Online747 | P a g e
List of Figures: YFigure 1 Existing level of competition in the UK supermarket industry.................................40Figure 2: Effect on Loyalty of Customers.................................................................................41Figure 3: Factors affected competition....................................................................................41Figure 4: Effect on Price Behavior of Food Retailers.............................................................42Figure 5: Price Strategy Adopted by Different Retailers.........................................................42Figure 6: Result of Price War on Employee’s Turnover..........................................................43Figure 7 : Challenges in terms of increasing rate of customer loyalty....................................43Figure 8Result of price war and effect on the customers........................................................44Figure 9 Effect of price war on the sales, margin and subsequent profit.................................44Figure 10 : Impact of German’s Retailers on Competition......................................................45Figure 11: Effect on UK’s Retail Segment..............................................................................45Figure 12 Existing level of competition in the UK supermarket industry is assessed by TESCO employees...................................................................................................................49Figure 13: Effect on Loyalty of Customers...............................................................................49Figure 14: Factors affected competition..................................................................................50Figure 15: Effect on Price Behavior of Food Retailers...........................................................51Figure 16 : Challenges in terms of increasing rate of customer loyalty..................................52Figure 17Result of price war and effect on the customers......................................................52Figure 18 Effect of price war on the sales, margin and subsequent profit...............................53Figure 19 : Impact of German’s Retailers on Competition......................................................54Figure 20: Effect on UK’s Retail Segment..............................................................................558 | P a g e
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