LSBM103 Business Environment Report: UK Food Retail Analysis

This report delves into the UK food retail sector, examining its business environment and key challenges. It begins with an introduction to the sector and identifies two major problems impacting food retailers: changes in buyer needs and the reduction of carbon footprint. The report then applies the PESTEL model, analyzing the political, economic, social, technological, environmental, and legal factors influencing the sector. Furthermore, it explores how these issues affect the sustainability of food retailers, using examples like Morrison's and Tesco. The report concludes with a reflection on the challenges faced during its preparation and lessons learned, emphasizing the importance of data accuracy and reliable information gathering. The analysis highlights the dynamic nature of the food retail industry and the need for businesses to adapt to evolving consumer preferences and environmental concerns.

Report
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Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
Two major problems that affect food retail sector.................................................................2
PESTEL model.......................................................................................................................3
Issues that impact sustainability of food retailers...................................................................5
Reflection...............................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8
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INTRODUCTION
Business environment can be defined as set of internal and external components such as
socio cultural, economic and other factors. It can be split in both micro and macro environment
based on perspective. The current assignment will be based on food retailers as one of the
profitable subsectors, in the UK. It will explain two different problems that have impact upon
chosen subsector and will describe application of PESTLE model. Furthermore, this study will
justify affects of two issues on sustainability of subsectors. It will define right examples of
companies and reflection based on two challenges as well as lessons learned from experiences.
MAIN BODY
Two major problems that affect food retail sector
Food retail sector is one of the biggest industries in the United Kingdom, with an annual
turnover of more than £104 billion. Online food sales are presenting excellent progress, with
industry being valued £12.3 billion. There are many food retailers and wholesalers are operated
their venture under this sector in effective manner. While managing their business functions and
operations in sector, there are several factors that put negative impact on it. These elements
create many issues, which is not suitable for long term success of chosen subsector.
Issue 1- Changes in buyer needs-
Food retailers & wholesalers, face issue due to changes in needs or preferences of their
customers because it directly impact on sales and productivity of supermarkets in negative
manner (Anand Dash, 2019). It can be said that, consumers are the main stakeholders of a
company, as they help to generate revenue and increase profitability of subsector even better.
Their needs are in recent time changes because to market trends that affect selected sector
negatively. These changing process, may lead to decrease sales and profit margin of business. It
can influence buying behaviour of potential consumers to industry and drive them towards take
further alternation, which in the future consumes a lot of time and efforts. Many people moved
towards considering healthy habits and purchase grocery items accordingly, which is quite
beneficial for them but not for supermarkets operated under Food retailer & wholesalers.
The overall thing is that this activity creates an issue in front of subsector from which
they want to overcome by using range of approaches. Most of people in the whole world are
changing their buying preferences and food related needs, because of health issues (Ota, Sangita
Ray and Kumar, 2020). Due to these things, food retailers face issues to manage their inventory
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accordingly. When companies under this sector could not satisfy customers and cater products
accordant to needs, they will not be able to retain them. When companies under this sector could
not satisfy consumers and cater products accordant to needs, they will not be able to retain them.
It lead to sales deduction and less production that is not appropriate for the greater success of
selected subsector
Issue 2- Reduction of carbon foot print-
Along with above problem, Food retailers and wholesalers in UK faces another issue as
well, which also put negative impact on same things or activities of industry like above issue
have done (Canavari and Coderoni, 2019). In recent time, government and buyers in the entire
world demand to reduce carbon foot print in business practices of each sector. It creates issue for
food retailers and wholesalers subsector and its organizations like TESCO and Morrison’s. Most
supermarkets in chosen subsector are not taking part in CSR practices. Their business practices
put impact on environment that can be as much as 12 % higher than degree the firms confess to.
Lack of contribution in carbon foot print reduction bring several challenges in front of subsector
and drive management towards considering better options to overcome these issues in systematic
& effective manner.
Millions of customers are liked to purchase goods and daily use products from those
grocery providers who are taking essential part in corporate social responsibility and Carbon foot
print reduce is one of them (Karwacka and et.al., 2020). Use of plastic impact environment and
natural beauty of earth, people are more concern and put a lot of pressure on subsector to avoid
using it while packaging their product, which is quite beneficial for business and atmosphere as
well. Food retailers and wholesalers due to this problem could not be capable to operate their
ventures effectively.
PESTEL model
Political factor-
There are many factors are accessible in the world of business that impact operational
efficiency and management practices negatively or may positively (Cawley and et.al., 2019).
Here, raise in sales taxes is one of the political elements that put negative impact on profitability
of Food retailers & wholesalers. This action increase prices of production and marketing as well,
which is not suitable for subsector.
Economic factor-
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Unemployment is one of the economic factors that put negative impact on progress and
success of chosen subsector. It can be said that, when people do not have a job and their key
resources are limited, they customers could go on saving mode. It leads to few spending that
means less sales and profits. Jobless people are unable to purchase everything, which directly
impact selected subsector negatively.
Social factor-
Life styles changes move person to make certain modification in their needs and buying
habits, it is one of the social factors examples that create issue for Food retailers & wholesalers.
As discussed above this factor put negative impact on success, productivity, profits margin and
revenue of subsector in negative manner (Singh and Verma, 2017). It also affects current
strategic decisions making procedures. Needs of each buyer can be change and that impact
negatively upon subsector.
Technology factor-
Technology advancement is the best element that gives excellent opportunity to chosen
subsector in term of gaining attention of new buyers and competitive edge. With the help of
advanced marketing technologies and digital advertisement tools, Food retailers & wholesalers
effectively drive their sales rather than before by generating brand awareness through all these
things. When subsector uses the latest marketing platforms they can aware people at international
level about their products and services.
Environmental factor-
In recent time, each buyer and local as well as national authority put pressure on food
retailers and wholesalers as well to reduce their carbon foot print on current business actions and
activities because it help to make environment safe from harmful elements (Lombardi and et.al.,
2018). There are varied ways subsector can consider to overcome this impact and satisfy their
stakeholders in ethical manner.
Legal factor-
Changes in Labour laws such as Equality Act 2010, impact existing employment policies
and strategies of food retailers and wholesalers, in negative manner (Taillie and et.al., 2017).
Management due to this factor feel pressure and stress because they have to change everything
according to new terms and conditions that is not easy for them.
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Issues that impact sustainability of food retailers
Business sustainability is defined as managing needs of stakeholders; it is procedure by
which companies operated in Food retailers and wholesalers subsector manage financial,
environment and social risks, chances and challenges (Rezaee, 2017). Firms that incorporate
above concept into decision making action can reap important financial advantages and gain
attention of more interest from investors that is a way to long term success.
Above two issues such as changes customers needs can put impact on subsector
sustainability because they could not satisfy people successfully and identify the reason behind
changes in buying and decision making activity of individual customer. For example, Morrison’s
is one of the best food retailers in the UK; they provide range of services and products to target
market. Firm while operating their business in chosen sector face issue due to lack of focus on
current market trends and its affect on purchasing decision of people. This thing put negative
impact on sustainability of supermarket and decreases their sales more than companies who are
running in same industry (Goworek and et.al., 2018).
Sustainability of businesses caters a lot of benefits to sector in term of improving their
market image in effective manner and increasing productivity as well. But discussed problem
does not give this chance to chosen subsector and firms like Morrison’s to gain advantages.
Second problem that can impact food retailers and wholesalers sustainability in negative
manner is carbon foot print reduction. This issue affect more than first one because it relate to
environment safety and protection, which is really very important for each person in modern
world. People effort to make atmosphere nearby them clean that helps to live life in those place
where each resident can take fresh air. For instance, TESCO is one of the supermarket brand who
face same issue because lack of practicing corporate social responsibility practices. Organization
carbon foot print does not involve emissions caused by buyers driving to and from their outlets.
It can be analysed that real affect firm has on environment can be greater than 11 times. This
factor force company to take major actions against this activity, which is actually quite essential
for overall business in term of building their brand image and strengthening relationship with
potential customers.
Because to this problem Tesco made key promises to their buyer and other stakeholders.
They decide to do everything by focusing on environment sustainability, for example
management of organization decide to reduce plastic use for packaging and drive towards using
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paper bags. This decision can put positive impact on sustainability of business even better than
its rivals. Increasing utilises of recycled sources and things can effectively reduce carbon
footprint of plastic wrapping. Increasing carbon foot print always affected negatively on
subsectors and their supermarkets as it decreases consumers base.
Reflection
I am really very excited to prepare this report, because the concept is actually quite interesting
for me. But due to some problems my work has been affected in negative manner. While
preparing this study, I have faced two different types of challenges, which I have overcome by
using appropriate tactics and methods. First challenge that I have faced while accomplishing
their report is high data privacy. It is one of the most common challenges that every researcher
faced, like me. I want to overcome this barrier on time and for that I decide to take approval for
those websites where I would gather data about my work. After getting out of this problem, I am
able to get desire outcomes and prepare study with full of key information’s and explanations.
This is quite challenging for me but I can manage it.
The next challenge I had to overcome while making present assignment is collection of
reliable data. I need to collect information about those companies who are impacted due to above
two issues, but due to a lot of information’s on websites and internet I could not be able to find
out reliable info. I have to present my work without making any kind of mistake, and these
challenges restrict me to do that.
But still I had gain success, because I learned how to search and identify data that is
appropriate for my topic. I have learned from above experiences how to gather important and
correct data and find out which one is reliable. I have also learned that how can I take
information about issues faced by subsector to people who known about it. I decide to conduct
face to face meeting with each individual who have meaningful and suitable data about problems
in context of Food retailers and Wholesalers.
CONCLUSION
From above analysis, it has been summarized that food retailers and wholesaler as
subsector are gaining several advantages in term of increasing their profitability and customer’s
base even better. All these things happen because sector is taking appropriate actions and
approaches for it, which make it stronger to grab competitive advantages and other things
successfully. By summing up above discussion, it has been concluded that subsector effectively
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overcome negative impact of political, economic, social and other factors on sustainability of
their ventures. As it provides many advantages and benefits to subsector in return increased their
market share and revenue.
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REFERENCES
Book and Journals
Anand Dash, A., 2019. Consumer Buying Behaviour In Fmcg Segment And Its Impact On Retail
Sector. Journal of the Gujarat Research Society. 21(14). pp.1826-1861.
Canavari, M. and Coderoni, S., 2019. Green marketing strategies in the dairy sector: Consumer‐
stated preferences for carbon footprint labels. Strategic Change. 28(4). pp.233-240.
Cawley, J and et.al., 2019. The economics of taxes on sugar-sweetened beverages: a review of
the effects on prices, sales, cross-border shopping, and consumption. Annual review of
nutrition. 39. pp.317-338.
Goworek, H and et.al., 2018. Managing sustainability in the fashion business: Challenges in
product development for clothing longevity in the UK. Journal of Business Research.
Karwacka, M and et.al., 2020. Sustainable Development in the Agri-Food Sector in Terms of the
Carbon Footprint: A Review. Sustainability. 12(16). p.6463.
Lombardi, M and et.al., 2018. Toward urban environmental sustainability: The carbon footprint
of Foggia's municipality. Journal of Cleaner Production. 186. pp.534-543.
Ota, R., Sangita Ray, S. and Kumar, R., 2020. A Study on the Indian Consumer mindset towards
online shopping during the pandemic period: A special reference to Flipkart. Science,
Technology and Development. 9(7). pp.197-204.
Rezaee, Z., 2017. Business sustainability: Performance, compliance, accountability and
integrated reporting. Routledge.
Singh, A. and Verma, P., 2017. Factors influencing Indian consumers' actual buying behaviour
towards organic food products. Journal of cleaner production. 167. pp.473-483.
Taillie, L.S and et.al., 2017. Best practices for using natural experiments to evaluate retail food
and beverage policies and interventions. Nutrition reviews. 75(12). pp.971-989.
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