Challenges Faced by Retail Industry in UK: A Case Study of Morrison's Plc

This report provides an insight about the challenges being faced by the retail industry in UK, focusing on Morrison's Plc. It discusses the issues of bad market, employee retention, and digital disruption, and suggests strategies for managing these challenges.

Report

Abstract
This report provides an insight about the challenges being faced by the retail industry
in UK. In this Morrison’s Plc is taken as an organization and an analysis is carried out to
determine what challenges it is facing and how it is managing it. On finding, it is revealed
that the company is facing the problem of bad market because of Covid-19, employee
retention problem and the problem caused by digital disruption.

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
Challenges in UK...................................................................................................................3
Challenges in retail industry in UK........................................................................................3
Company background............................................................................................................4
Issues faced by the organization and responding and managing the issues...........................4
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................8

INTRODUCTION
Every business organization faces certain types of business problems which is an
indispensable part of the business organization. UK is considered as the top leading business
location but despite the benefits it brings to the business there are some complication which is
attached to it. The challenges are common but dealing with it is very uncommon and this
report provides a detail analysis of the same. Here, Morrison’s is taken as an organization
which is the leading supermarket chain, headquartered in UK. This report states about the
various challenges which is being faced by the organizations in UK. It also provides an
insight about the key issues it is facing and responding to it as well.
Challenges in UK
The key challenges that the businesses in UK is currently facing are – retaining and
recruiting the top talent is the major concern that the UK is mainly facing. The UK employers
have experienced the huge shortage of the skills which has resulted into increase in need for
hiring the new employees (What Are the Top UK Business Challenges in 2020?). Another
problem is most of the workers in UK are feeling a lot of stress about their present job which
also poses the real pose for the businesses irrespective of the size. There are also political
issues which is surrounding the business functioning. Now, it is clear that the Brexit is going
to happen and the Britain will leave EU, business organizations are holding back their big
moves and also affecting the employees right to live and work in UK. By the time, the Brexit
will be done, there will be another uncertain threat that the UK will be facing in regard to
Scottish exit. This thing can be dragged for weeks, months or years, which possess as another
challenge for the businesses in regard to connecting with the clients and the customers midst
the uncertainty prevailing in the country.
Challenges in retail industry in UK
There are few problems or barriers that the retail industry is currently facing which is
all connected to the technological evolution. Few challenges that the industry is facing is the
digital disruption which is largely because of the increase in the growth of e-commerce.
Consumers are more and more purchasing the items online (Retail Industry Challenges &
Opportunities In 2020. 2020). Maintaining the large customer base which calls for failure of
the organizations as with the changing trend and technologies, customers are more inclined
towards the personalization which is very important for maintain effective communication
and building brand loyalty. Another challenge being is because of the global pandemic

Covid-19. Also, because of the tough competition in the market it is becoming problematic
for the retailers to retains the employees for long term affecting the working of the company.
Company background
Wm Morrison is the leading supermarket chain in the UK. It was founded in the year
1899 by the William Morrison. Currently, the company employs the 110,000 employees as
per the 2019 data and is serving around 11 million customer base every week (Company
History. 2020). It has almost 500 stores all across UK along with the online home delivery
service as well. The business mainly deals in fresh food and grocery and most of items is
processed in its manufacturing facilities. It works on providing competitively low priced
products and services to its customers as it is committed towards helping the customers in
saving money and in getting value for money.
Issues faced by the organization and responding and managing the issues
General issue 1: Bad market
Morrison’s is currently facing the major challenge of bad market. The year 2020 has
been very worst for the most of the business organization but it can be further considered in a
positive way of opportunities. The market has been very down because of the decrease in the
disposal income of the people. The business conditions change continuously which increases
the requirement for the continuous market research as well which the Morrison’s fails to do
which has affected its sales, profits margins and the cost of operation. The in-store purchase
of the Morrison’s product has been reduced (Kirby-Hawkins, Birkin and Clarke, 2019). The
current crisis caused by the global pandemic Covid-19 has also impacted the requirement of
the consumer goods. The company also had to restrict the purchase being made by a customer
to be limited to a certain number so that the product can be reached to most of the people.
Therefore, putting restriction has actually affected the sales of the company’s products which
has resulted into ineffective cash flow in the business. Therefore, it becomes essential for the
company to come up with the plan to mitigate the problem that has led to the reduction in the
in-store sale of its products and services.
Managing issue 1: Bad market
The company can exercise control over this issue to some extend by the implementing
certain relevant steps in taking the advantages of the situation in a positive manner. The
major the problem has been caused because of nation wide lock down and the threat among
the people for moving out of their houses. The company can actually take advantage of this

situation by effectively introducing the online stores where all of its products is being made
available to the customers and also, it can open convenience stores in order to revive its
flagging fortune. Using the online, mode of sales will help it in reducing the cost that used to
be incurred in operating the store (Sullivan and Gouldson, 2016). The company should
continuously work on gaining in-sight about the changing market conditions which will help
in planning for the same ahead of time so that some of negative impact of it can be minimised
and things can be managed in an effective manner. This will help the Morrison in meeting
with the tough time in a proper way so that it can meet with the challenges on time and turn it
into an opportunity for the betterment of the business (Nazir, 2020). Going online completely
for the time being is very beneficial for the company in managing its financial position and
the cash flow requirement. The sales of Morrisons raised by 5% in the first 6 months of 2020
(Guest, 2019). It can also provide a new in-store experience by offering attractive gift and
offers as per the occasions like Christmas, new year in order to meet the tough times.
General issue 2: Problem in retaining the employees for long term
Another issue which is being faced by the company is in respect to the retaining,
motivating and inspiring the employees. There is an increase in the employee turnover rate
which is company is dealing with. This affected the proper and appropriate functioning of the
organization. This problem is mainly faced in the retail industry as there is a tough
competition prevailing out there which tends to attract the employees towards another
organization or the competitors. Morrison despite of having attractive and innovative
methods put in place for the purpose of motivating its employees towards work and remain in
the business but then too it is not able to retain the employees for the long term even the
senior level employees are looking for other job (Pandey and Patel, 2020). This has made it
difficult for the company to get the required skills and attitude which is in need for the
purpose of running the business in the far effective manner. This issue has affected the
performance and productivity of the business and it is mostly in case of the retail store where
the salesperson and the manager are working for a short duration and then leaving the job.
The increase in employee turnover also leads to increase in cost for the organization for
recruiting the other staff as soon as possible for filling the gap. Therefore, it is also another
important issue that the company is currently facing affecting its working and business
functioning in a significant manner.
Managing issue 2: Problem in retaining the employees for long term

This challenge is very crucial to be mitigated by the organizations as it leads to
decreasing the brand value of the company. The only and the most relevant method for
tackling this problem is by increasing the employee engagement by timely providing the
employees with certain work relevant training programs that will help in increasing and
maximizing the work potential of the employees. This process can be easily automated with
the help of the solutions like human resource management system (Necheporchuk, 2017).
Other than this, the company can also organize a one to one session where it will get
interacted with the each employee of the organization separately in order to know the
thoughts about the working condition, their needs and wants so that changes can be
introduced in the organization system so that it will help in retaining and motivating the
employees to remain in the organization and work with full dedication. Also, the Morison’s
have introduced a new attractive incentive method for luring employees in meeting with the
desired changes along with achieving the desired target set which will be beneficial for both
the company and its employees.
General issue 3: Threat of losing the market and emergence of disruptive technologies
The all the big four giant in the market are the facing the similar problem with respect
to the losing its customers base to the German discounters called Aldi and Lidl which are
giving tough competition to all these big giants by providing products at the lower prices to
the customers along with the huge discounts which is grabbing the attention of the customers.
This has completely disrupted the retail market in the nation (Mason, 2019). These German
discounters are expanding their business increasing which is the major concern for the
company Morrison’s as the performance of many of its stores has been affected because of
which it has been forced to close down handful of its stores on the basis of their performance.
This has even forced the company to approach the major job cuts as well. Also, the shares of
the Morrison’s have lost one fifth of its value in the last 12 months and is also presently
varying hands for 183p. The emergence of disruptive technologies has also affected the
business as the increase in the use of internet shopping is shedding the thousands of jobs and
in 2019, nearly 57,000 street jobs has been put on stake. Thus, both these problems are the
huge challenges for the company to fight with in order to remain in the business.
Managing issue 3: Threat of losing the market and emergence of disruptive technologies
For effectively meeting up with the changing market condition, Morrison’s has
already take step by eliminating all the highly paid managers across all its 500 stores but at

the same time it is creating the jobs for about 7000 based on the hourly paid roles with the
objective of meeting with the improved customer service and this result into creation of
approximately 4000 new jobs (Wood, 2020). Also, in order to remain competitive in the
market and give tough fight to the German discounters, the organization should come up with
the innovative and creative idea to draw the customers attention towards it which can be in
terms of increase in the quality product or reduction in the price of the product. The needs to
point out the distinguishing factor which will help in dealing with the changing scenario in
efficient manner (Smith, 2020). This will help in differentiating its products from its
competitors and along with that the company should work on coming up with the ideas that
includes usage of the technologies. Taking full advantage of the innovative technologies and
the online method of sales will help it in managing and meeting up with the challenges in an
effective and efficient manner.
CONCLUSION
It can be summarized from the above that the there are various factors that one can not
even thing about it as a problem but it is actually the one that is having a huge impact over
the business functioning. The various issues that caused challenge for the company like bad
market, upgradations in the latest technologies and so forth all has affected the way business
is being carried out. Along with that, the key and crucial remedial steps that are undertaken
by the organization for the purpose of mitigating the challenges that has resulted into better
and effective management of the business entity in an appropriate manner. The approaches
used by the Morrison is very nice in job security for those who have been removed. For all
these to work in a desired manner it is important for the organization to effectively and
continuously work on market research and analysis to identify the issues in advance that’s
what is done by Morrison’s in making it possible.

REFERENCES
Books and Journals
Kirby-Hawkins, E., Birkin, M. and Clarke, G., 2019. An investigation into the geography of
corporate e-commerce sales in the UK grocery market. Environment and Planning
B: Urban Analytics and City Science. 46(6). pp.1148-1164.
Mason, R., 2019. Developing a Profitable Online Grocery Logistics Business: Exploring
Innovations in Ordering, Fulfilment, and Distribution at Ocado. In Contemporary
Operations and Logistics (pp. 365-383). Palgrave Macmillan, Cham.
Necheporchuk, D. I., 2017. DIAGNOSTICS OF STAFF TURNOVER IN RETAIL TRADE
AND APPROACHES TO TRAINING OF NEW EMPLOYEES.
In INTERNATIONAL INNOVATION RESEARCH (pp. 198-200).
Pandey, P. and Patel, G., 2020. Retaining front-line service employees: introducing analytic
hierarchy process in the retail industry. International Journal of Management
Practice, 13(3), pp.321-337.
Sullivan, R. and Gouldson, A., 2016. Comparing the climate change actions, targets and
performance of UK and US retailers. Corporate Social Responsibility and
Environmental Management. 23(3). pp.129-139.
Online
Company History. 2020. [Online]. Available Through:< https://www.morrisons-
corporate.com/about-us/company-history/>.
Retail Industry Challenges & Opportunities In 2020. 2020. [Online]. Available Through:<
https://linchpinseo.com/common-challenges-facing-the-retail-industry/ >.
What Are the Top UK Business Challenges in 2020? [Online]. Available Through:<
https://representcomms.co.uk/top-uk-business-challenges-2020/>.
Wood, Z. 2020. Morrisons to cut 3,000 managers and take on more shop-floor staff.
[Online]. Available Through:<
https://www.theguardian.com/business/2020/jan/23/morrisons-to-cut-3000-
managers-and-take-on-more-shop-floor-staff >.
Smith, C., 2020. Morrisons supermarket axes 3,000 managers in huge shake-up. [Online].
Available Through:< https://www.bbc.com/news/business-51223217>.
Guest, N., 2019. How in-store experiences can give Morrisons an edge over its discounter
rivals. [Online]. Available Through:< https://www.thegrocer.co.uk/service-and-
availability/how-in-store-experiences-can-give-morrisons-an-edge-over-
discounters/575752.article>.
Nazir, S., 2020. Morrisons profits rise despite coronavirus-linked challenges. [Online].
Available Through:< https://www.retailgazette.co.uk/blog/2020/03/morrisons-sales-
top-400m-despite-coronavirus-linked-challenges/ >.