Research Report: Declining Sales in UK Supermarket Tesco Branches

This research project investigates the declining sales of Tesco supermarkets in the UK, with a specific focus on the Woolwich area. The study explores various factors influencing sales, including market saturation, recession, competition, and the rise of online shopping. Employing a qualitative approach, the researcher utilizes a descriptive research design and interpretivism research philosophy, collecting data through questionnaires and secondary sources like books and online journals. The research analyzes data from a sample of 25 Tesco employees using thematic analysis. The findings reveal the impact of market trends on Tesco's sales, strategic decisions made in response to declining sales, and recommendations for improvement. The report highlights the challenges faced by traditional retail sectors and the need for strategic adaptations to maintain market share and profitability.

Research Project
1

ABSTRACT
The success of a retail organization is greatly influenced by its ability to meet demand of
consumers with an appropriate manner. This approach has direct impact on the sales and market
share of company. Furthermore, the management of retail organization has to consider several
elements of external market for attainment of sales targets of business entity. The present is
Examining Declining Sales in the UK Super Markets Retailers: Focus on Tesco Branches within
Woolwich Area of [GREENWISH Borough of London]. The topic of present research provides
understanding about different factors that influence sales of supermarket in particular location.
For completion of different aspects of investigation, researcher has applied an appropriate
research methodology.
As per the qualitative nature of investigation, researcher has considered different tools of
research methodology by using qualitative method. Descriptive research design and
interpretivision research philosophy has been selected for handling of various operations of
research. Both primary and secondary sources have been applied by researcher for collection of
data through questionnaire, books, online journals etc. As per random sampling approach,
researcher has taken a sample of 25 employees of Tesco and evaluation of data is carried out by
using thematic analysis with the help of graphs etc. As per the objectives of investigation,
researcher has found that traditional retail sector in UK is facing several issues in the form of
market saturation, recession and high competition etc. It directly influences negative impact on
sales of different retail firm. The study further addressed that emergence of new retail chains
along with growth in online shopping sites has played vital role in sales reduction of traditional
supermarkets. By focusing the objectives of investigation, researcher has examined that a retail
firm takes wide range of strategic decisions such as attractive offers, changing of staff and
closing of store as a consequence of sales reduction.
2

TABLE OF CONTENTS
RESEARCH PROPOSAL ..............................................................................................................4
1.1 Outlining the research specification.......................................................................................4
1.2 Identification of the factors that contribute to the process of research project selection and
factors that motivated the process of topic selection for research...............................................5
1.3 Literature review....................................................................................................................5
1.4 Research Project specification...............................................................................................6
1.5 Appropriate plan to handle different elements of investigation.............................................7
RESEARCH REPORT .................................................................................................................10
Research Topic...........................................................................................................................10
Introduction................................................................................................................................10
Rationale of the study................................................................................................................10
Research aim..............................................................................................................................10
Research objectives....................................................................................................................11
Research questions.....................................................................................................................11
Literature review........................................................................................................................11
Research methodology...............................................................................................................14
Data analysis and discussion......................................................................................................15
Conclusion and Recommendation.............................................................................................22
Recommendation for the area of future research.......................................................................23
REFERENCES..............................................................................................................................24
APPENDIX ...................................................................................................................................27
3

RESEARCH PROPOSAL
1.1 Outlining the research specification
Retail industry in UK has faced significant up and downs due to change in market
conditions along with economy growth of country. These elements are having direct impact on
sales, spending and market competition. Therefore, every business organization is required to
consider several elements for maintaining efficient position in the market in the from market
share and sales of company (Burrows, 2012). The emergence of new retail firm along with
growth of online retail market has created negative impact on the sales and performance of retail
firms and conventional supermarkets. In the context, the present research work will be carried
out for Examining Declining Sales in the UK Super Markets Retailers: Focus on Tesco Branches
within Woolwich Area of [GREENWISH Borough of London].
In this regard, the present investigation will be focused to address various factors that can
be considered as major causes of sales decline among different branches of Tesco within
Woolwich area. Therefore, this investigation is going to examine current market trends that are
identified in retail sector in UK and their impact on sales of different companies. Furthermore,
the present research work will evaluate the impact of sales reduction in stores of particular on
Tesco along with its strategic decisions. In this context, aim and objectives that will be followed
by researcher for collection of wide range of information are mentioned below:
Aim of the study
“Examining Declining Sales In The Uk Super Markets Retailers: Focus On Tesco Branches
Within Woolwich Area Of [GREENWISH Borough Of London].”
Objectives of research
 To examine current trends of retail industry in UK.
 To assess the reasons of sales reduction in the supermarkets of Tesco within Woolwich
Area.
 To identify impacts of decline in sales on the strategic decisions of the Tesco
 To recommend improvement strategies to increase sales of Tesco' supermarkets.
Research Questions
1. What are the current trends of retail industry in UK?
4

2. What are the important reasons of sales reduction in the super markets of Tesco within
Woolwich Area?
3. How does decline in sales of supermarkets within Woolwich Area influence business
decisions of Tesco?
1.2 Identification of the factors that contribute to the process of research project selection and
factors that motivated the process of topic selection for research
The present researcher is going to analysis different elements that have been played
important role in reduction of sales of Tesco’s retail outlets and supermarkets situated in
Woolwich Area. With the help of this research, investigator will be able to address the current
market trends of UK retail sector through which researcher can understand the impact on market
fluctuations on sales and performance of a business entity (Dougherty and Gray, 2006). The
present investigation will assess various causes of sales reduction in particular area through
which investigator will be able to address certain market conditions in which management of
retail organization should have to develop various strategies to increase sales of supermarkets in
particular along with assessment of alternative strategic decisions in order to avoid losses. This
study will provide information related to different business strategies of retail organization
through an organization is able to handle adverse market conditions. This element of research
makes investigation more interesting in the point of view of researcher.
1.3 Literature review
The research of Fransoo, Waefler and Wilson (2010) has found that there have been
significant fluctuations identified in retail industry. It has created huge impact on the sales of
retail firms in UK. Author further has addressed several elements such as change in lifestyle of
people, economy conditions of UK, emergence of new companies, online shopping etc. In this
context, it has been evaluated after recession several new companies have started their operations
in retail sector and continuous up- down in economic trends have made people more
conservative while performing any kinds of shopping (Pepe, 2015). All these factors have
created adverse impact on the sales of traditional big retail firms such as Tesco, Walmart and
Sainsbury. Ganesan (2015) has evaluated that change in market conditions is considered as most
important element that influences needs and desires of consumers that have direct impact on
sales value of particular supermarket in an area.
5

The study of Hansen and Grunow (2015) has addressed that emergence of online retail
market has created huge impact on sales of domestic super markets and retail stores. This is
because the online retail firms are offering the more discounts and attractive offers along with
personalized door step services. In addition to that wide product range and easy return policies
have played important role in growth of online retail firms. This thing has created direct impact
on the sales of supermarkets and retail stores. In this context, Wallace and Stahl (2010) have
evaluated that emergence of various small and external firms in retail sector have influenced
profit and market share of traditional firms in negative manner (Ingram, 2012). This is because
new firms are offering new product range with attractive and creative offers that influence
regular consumers of other firm. Therefore, increase in market competition has been considered
as an important element of decline in sales of company.
The research of Allwood and et.al. (2008) has found that reduction in sales of
supermarkets is having direct impact on the overall performance of the company. In order to
handle this situation, the management of retail organization takes wide range of strategic
decision such as new offers, new product range, discount offers, creative marketing etc. All these
factors are playing important role to increase the sales of supermarket. But, if management is
failed to handle this situation and organization is facing continuous losses due to downfall in
sales. In this situation, company takes decision to shut the supermarkets and retail outlet for
avoiding the losses. In this context, the investigation of Yu and Ramanathan (2008) has
addressed that shutting of retail brand is the final decision of the company when all the measures
to improve performance and sales have been failed. Furthermore, it has been addressed that the
business decision related to shutting of retail outlet is very crucial tasks for company for
handling because organization faces several losses.
1.4 Research Project specification
As per the nature of investigation, there are two type of research method are available for
researcher such as qualitative and quantitative through which investigator will be able to manage
several aspects of investigation. As per the nature of investigation, application of different
aspects of study will be carried out as per the principles of qualitative research method (Merriam,
2009). This is because the present research work will be carried out to assess various causes that
influence sales reduction in particular supermarket. As per the motive of present investigation,
6

descriptive research design will be applied by researcher for collection of wide range data
(Johnson and Clark, 2006). On the other hand, exploratory research design will be found useful
in collection and evaluation statistical information as per the research requirements.
Interpretivism and positivism research philosophy could be selected by researcher in
order to manage distinct kinds of research operations. In the context of present study, researcher
will uses interpretivision research philosophy through which researcher will be able to assess
reasons and purpose behind any research outcomes (Johnson and Christensen, 2010). Data
collection is termed as a most important section of research methodology. The reliability of
outcomes and finding of research is mainly associated with appropriateness of different sources
of data. By focusing research targets, researcher will consider both primary and secondary
sources to collect wide range of information associated with different aspects of retail sector that
decrease the sales of supermarket of Tesco in particular location. Thematic analysis will carry
out to examine the information that will collect from primary sources. For taking an appropriate
sample for collection of primary data, researcher has Probabilistic and Non-Probabilistic tactics
that can be used to assess best sample (Garner Kawulich and Wagner, 2012). In the present
research, probabilistic sampling will suitable when researcher is required to carry out the random
selection of people. In the present study, researcher will take responses from employees of Tesco
who are appointed in supermarkets of Woolwich. In the present, a sample of 25 employees will
be appropriate.
1.5 Appropriate plan to handle different elements of investigation
For generation of appropriate research outcomes, investigator will require to follow an
appropriate research plan through which wide range of activities will be scheduled by researcher
with an appropriate manner. On the basis of a systematic plan, researcher can attain all criteria of
investigation. This approach would assist researcher to generate feasible and research outcomes.
Different stages that will be followed by researcher in completion of various tasks are presented
with the help of below mentioned Gantt chart:
Activity Week1 Week2 Week3 Week4 Week5 Week6 Week7 Week8 Week9
Developing the
Research Proposal
7

Evaluating various
literature
Finalizing the aims and
objectives
Drafting literature
review with an
appropriate information
Collection of
secondary data
Analyze secondary data
Developing research
approach
Creating research
methodology
Development of
questionnaire
Arranging the interview
Conduct the interview
Accumulate the data
Draft Findings
Analysis and evaluating
data
Complete remaining
chapters
8

Submit it to tutor and
await for feedback
RESEARCH REPORT
Research Topic
“Examining Declining Sales In The Uk Super Markets Retailers: Focus On Tesco Branches
Within Woolwich Area Of [GREENWISH Borough Of London].”
Introduction
In the contemporary retail sector, there has been significant fluctuations addressed among
sales, income along with the market share of different companies due to several changes are
identified in consumer behaviour, emergence of new firms along with application of new
business strategies to gain appropriate market share etc. These elements are having direct impact
on sales, spending of people and market share of companies (Mena, Adenso-Diaz and Yurt,
2011). Therefore, every business organization is required to consider several elements for
maintaining efficient position in the market in the from market share and sales of company. In
this context, the emergence of new retail firm along with growth of online retail market has
directly influenced efficiency of existing firms as well as their market position. Therefore, the
present study is carried out to examine several factors that play important role in sales reduction
of retail firms.
Rationale of the study
The present study is organized to examine reduction in sales of retail firm or
supermarkets in UK. In this regard, Tesco has been taken for investigation because company is
facing issues associated with reduction sales in the supermarkets of Woolwich Area. Therefore,
the present investigation is tired to determine different factors that influence sales reduction
along with their consequences on strategic business decision (Wrigley and Lowe, 2014). In this
context, there have been several studies carried out to assess role on satisfaction of consumers in
sales of company along with impact of market conditions on the retail business. But, the present
research work is presenting some distinct in the form of causes of sales reduction in
supermarkets associated with particular area and
9

Research aim
The primary research work is carrying out for Examining Declining Sales in the UK
Super Markets Retailers: Focus on Tesco Branches within Woolwich Area of [GREENWISH
Borough of London].
Research objectives
The objectives of current investigation that assists researcher in completion of various
tasks and activities with an appropriate manner are mentioned below:
 To examine current trends of retail industry in UK.
 To assess the reasons of sales reduction in the supermarkets of Tesco within Woolwich
Area.
 To identify impacts of decline in sales on the strategic decisions of the Tesco
 To recommend improvement strategies to increase sales of Tesco' supermarkets.
Research questions
The research questions provide guidance to researcher for handling of various strategies
to generate valid and reliable outcomes. Some important elements are discussed below:
1. What are the current trends of retail industry in UK?
2. What are the important reasons of sales reduction in the super markets of Tesco within
Woolwich Area?
3. How does decline in sales of supermarkets within Woolwich Area influence business
decisions of Tesco?
Literature review
Current trends of retail industry in UK
The research of Haskel and Sadun (2012) has addressed that there has been significant
fluctuations identified in retail industry. It has created huge impact on the sales of retail firms in
UK. Author further has addressed several elements such as change in lifestyle of people,
economy conditions of UK, emergence of new companies, online shopping etc. As per the report
of RBS, it has been analyzed that consumer spending has fallen significantly during the financial
crisis. Furthermore, slow recovery in individuals and household spending is addressed due to
high employment; weak wage growth and relatively high inflation rate (Smith, 2010). It also
creates negative impact on the sales of retail companies. It has been analyzed that consumer
10

spending is going to increased by 1.5% in this years as compared to 1.2% in 2012. This report
has determined that mix of stores has been altered with the value shops up by 12.4%,
independence convenience outlets up by 17% and 5% reduction is identified in chain stores
(Retail 2023: Trends affecting retail strategy over the next decade, 2013). In this context, it has
been evaluated after recession several new companies have started their operations in retail
sector and continuous up- down in economic trends have made people more conservative while
performing any kinds of shopping.
The study of Gwynne (2008) has found that UK economy has recorded slight
improvement in 2014 but retailers are required to work hard to convince shoppers to part with
their money. All these factors have created adverse impact on the sales of traditional big retail
firms such as Tesco, Walmart and Sainsbury. This thing has created direct impact on the sales of
supermarkets and retail stores. Therefore, increase in market competition has been considered as
an important element of decline in sales of company (Fernie, 2009). As per the analysis of
financial statements of Tesco, it has been addressed that the overall revenue of Tesco is reduced
to 62,284 GBP in 2015 as compared to 63,557 GBP in 2014 (Tesco PLC ADR, 2015). In addition
to that business entity is also facing losses in 2015 due to high expenses of company. In similar
way, the revenue of Sainsbury is also going down to 23,775 GBP in 2015 as compared to 23,949
GBP in 2014. Apart from that gross margin of business entity is also reduced to 5.1% in
comparison of 5.8% of 2015 (Sainsbury (J) PLC, 2015). On the basis of these figures, it can be
stated retail sector is facing downturn in income and overall sales of different companies due to
change in perception of consumers along with adverse market conditions. England and John
England (2012) have evaluated that change in market conditions is considered as most important
element that influences needs and desires of consumers that have direct impact on sales value of
particular supermarket in an area.
Reasons of sales reduction in the supermarkets
The investigation of Ambler-Edwards and et.al. (2009) has evaluated that emergence of
various small and external firms in retail sector have influenced profit and market share of
traditional firms in negative manner. This is because new firms are offering new product range
with attractive and creative offers that influence regular consumers of other firm. In this regard,
author further argued that price wars and falling cost of food commodities have played important
11

role in declining of the sales of retail firms and supermarkets. The study of Fernie, Sparks and
McKinnon (2010) has addressed that emergence of online retail market has created huge impact
on sales of domestic super markets and retail stores. This is because the online retail firms are
offering the more discounts and attractive offers along with personalized door step services. In
addition to that wide product range and easy return policies have played important role in growth
of online retail firms. The research of Yu, Ramanathan and Nath (2014) has determined that
emergence of new budget chains has promoted battle between top firms like Tesco, Sainsbury
etc. In addition to that this thing also sparked the price wars among companies to sustain market
share. All these elements have been important role in reduction sales and income retail firms. As
per the contemporary of retail market conditions of UK, Burrows (2012) has examined the
budget chains like Aldi and Lidi has gained significant growth in market conditions in different
supermarkets that has led negative impact on sales and market share of other firms like Tesco
and Sainsbury.
Impacts of decline in sales on the strategic decisions of retail firms
For handling adverse market conditions, the management of retail firm has implemented
several changes in business operations and strategic decisions to improve position of company.
The research of Dougherty and Gray (2006) has found that reduction in sales of supermarkets is
having direct impact on the overall performance of the company. In order to handle this
situation, the management of retail organization takes wide range of strategic decision such as
new offers, new product range, discount offers, creative marketing etc. These tools have played
important role to increase the sales of supermarket (Fransoo, Waefler and Wilson, 2010). On the
other hand, if management is failed to handle this situation and organization is facing continuous
losses due to downfall in sales. In this situation, company takes decision to shut the supermarkets
and retail outlet for avoiding the losses. For example: Tesco has closed its 43 stores in 2015 in
order to cut the cost (Tesco names 43 UK store closures, 2015). On the basis of this information,
it can be stated that the decline in sales creates adverse impact on business expansion decision
and influences management to shut such branches which are suffering from losses. In this
context, the investigation of Pepe (2015) has addressed that shutting of retail brand is the final
decision of the company when all the measures to improve performance and sales have been
failed. Furthermore, it has been addressed that the business decision related to shutting of retail
12