Challenges and Impacts on Sainsbury's: A Report on Food Retail Market

This report discusses the impacts and challenges faced by Sainsbury's, a food retailer company located in London, UK. It evaluates key aspects and issues, uses the PESTLE model, explains key issues impacting business sustainability, and provides reflections on overcoming challenges.

Business — Report

Table of Contents
Business — Report......................................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Task 1 ..............................................................................................................................................3
Evaluation of key aspects issues......................................................................................................3
Task 2...............................................................................................................................................4
Pestle Model.....................................................................................................................................4
Task 3...............................................................................................................................................5
Explanation of key issues which can impact the sustainability of businesses.................................5
Task 4...............................................................................................................................................7
Reflection.........................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Food retailers and supermarkets are the place where people can purchase the
goods of their survival which includes grocery, vegetables, frozen products and other daily
needs. Supermarkets are the individual-services shop which offers a numerous variety of
substance, liquid and household items(Cai, and et.al, 2018). The report will discuss the impacts
and challenges by choosing a food retailer company named Sainsbury which is located at
London, United Kingdom. It is the second largest supermarket in the UK. This study will
illustrate the methods that how a retailer company can developed and grow in this field.
MAIN BODY
Task 1
Evaluation of key aspects issues.
As customers become more demanding, it creates an issue and challenges on the retailers
to fulfil their needs. Here, performing the two different problems that affect Sainsbury's
development.
Low price and high discount rates : In supermarkets, the largest risk faced by an organization
is the entrance of discount models and strategies which has been performed for approaching the
consumers. According to previous studies, It has been founded that Aldi grew 18 percent through
2013, those profits for discounts chains converted directly to huge loses, same as with Tesco,
market share fell 30.25 percent to 30.0 percent till the end. This same strategy occurred in
Sainsbury's from which they have to face a great loses for traditional supermarket chains. The
largest retail companies Tesco and Sainsbury's affected from giving the heavy discounts and
lose their productivity at the end of the year.
Let's consider an example which will describe how an organization has been affected
from the above mentioned issue. Sainsbury's is selling the grocery items at different costs, for
attracting and increasing the sale they mentioned the offer of 40 percent off on the items which
are more than cost of $5(Gu and Wang, 2020). On other hand, any organization lets keep a name
Tesco, which is providing the same strategy but keeping the discount rates $6 more than
Sainsbury's. This difference of applying a strategy better than other organization creates a huddle
makes puts down the economic chart.
Competition on the high end : Every day is challenging in any department whether its fashion
or food company. In a business, it is a basic point to understand the methods competitive

organizations of their sector. As it is mentioned above that Sainsbury's is a food retail company,
it is also facing a daily competition from other food industries. In the above paragraph, it has
been illustrated that because of low price and giving consumers heavy discounts already creating
loses in business(Lagorio, and Pinto, 2021). These ideologies are depended on what organization
is giving the better discounts from others companies. This discount chain affects majorly on the
supermarkets and decreases the values of an industry.
The most threatened part arrives when a new organization start its business, as the person
who is launching the business will have more methods, strategies and ideas for making the
profitable growth in an industry(Kor, et.al, 2017). The comparison of tradition and modern
supermarkets occurs when a new company is providing the unique offers with the qualitative
products and goods with excellent services creates a big challenge to survive in a food industry.
For example : As everybody knows Sainsbury's is a traditional food retail company, on other
hand Ocado, which is serving the better services like providing online services which is making a
large impact on the traditional retailers.
Task 2
Pestle Model
This model is a tool which is used in analysing the large instruction of management.
PESTLE includes Politics, Economic, Social, Technological, Legal and Environment.
Politic : This factor includes the tax, revenues, tariffs and political department such as
government changes the monetary system of a nation from which it affects on the tax and
regulations of a country.
Economic : Looking at economic section it involves the growth of the economy, wages rates and
min wages, unemployment and livelihood.
Social : Social refers to population growth, age distribution, health and safety. These are the
major factors which help an organization to grow by making such methods and planning of
demographic of their employee(Loureiro, 2020).
Technological : This analysis illustrate that innovation and invention of new technique which
help in improving the organization work and also helps an individual for their successful future.
These technologies include internet things, machinery, deep learnings and artificial intelligence
to develop a business.

Legal : The section of making any kind of legal activities which includes imports and exports
taxation and modifications in constitution which is impacting the employment. An organization
have rights to plan their policies and laws in its company to maintain the sets of employee
performance.
Environment : These activities are majorly performed wit the environment and surrounding of
ecological aspects which consider environmental protection, waste disposal laws and energy
consumption modulate.
According to PESTLE analysis, there two identify which is suitable for Sainsbury's
organization which affects the growth of the industry. Firstly, social analysis is important for the
above mentioned organization because practising the social culture it means the focusing on the
demographics of a people will help them to develop(Moran, et.al, 2020). Illustrating the example
to understand this point, in a grocery store every kind young, children and adult all these human
creatures come to purchase their needful items.
Sainsbury's need to keep different patterns and nutrient products for each age criteria
people. Keeping the focus on people health will attract the human to purchase the healthy and
safe products. Secondly, technological analysis will provide a maximum help to the customers as
well as for the retailers. Keeping the electronic devices like cameras and video tapping help a
seller to monitor the theft and on other hand consumers will have the ease in online paying
system as now so many people use digitalization process. These two are just an example to cover
the entire understanding of Pestle analysis.
Task 3
Explanation of key issues which can impact the sustainability of businesses.
Price Quality : In the context of an organization Sainsbury justifying the impacts on business.
For developing a business, it requires various strategies and modules to achieve a successful
position in a market. Serving the consumers the best rates for the product will improve the sales
as well productivity of an organization. Starting a business means taking a risk in finance and
accountability. Improving the occupation, needs to focus on some elements and majorly at cost
prices of services and goods which are delivering(Tan, and García, 2019). An organization takes
the help of discount strategy to approach the consumers. There are both impacts on the
department either positive and d negative. Here, framing a point with the help of examples of
company for understanding this concept in a better way.

Positive
1. Speedy way to increase the sale : This is the obvious reason that why an entrepreneur
uses this discount strategy, as it will improve the sales.
2. Clear out old stock : Offering the huge discount son old products will clear the rush
material in a store.
3. Attract new consumer : Providing the sales and discount vouchers looks attractive.
Consumer thinks that they will get a branded products in few ranges but it is not
completely true.
4. A loyal relationship with customer : Communication is the best source to approach the
consumers. Serving them an affordable rate, even in some cases a company negotiate the
prices to build a good and loyal relation with the customer.
Negative
1. Shifting the focus on costs : From this effect, people focus on the prices more than the
quality and brand products and enjoy getting the product at cheaper prices.
2. Low margin : The most disadvantageous impact is viewed from its topic only. Getting
the low share values causes loss.
3. Inviting the wrong attention : Performing the discount scan attract people but in future it
can set a bad precedence.
Competition : A healthy competition is occurs when a new company launch in a particular field
with its new developed ideologies and concept to become successful. For becoming an excellent
businessman requires spirit and ambition along with courage of not fearing with the competition
in the market. Considering the example on basis of Sainsbury's which is a retail
company(Vijayaraghavareddy, et.al, 2017). There are both effects beneficial and negative.
Positive
Awareness : In this society, it operates an awareness when an organization has a threat of being
substituted. It motivates a person or an individual to perform well and enhance all the skills and
knowledge to run the industry.
Differentiation : Consumers needs different products and services which is ease in utilizing.
People want comfortable procedures to use. Sainsbury's is making the prices affordable to them
and as well for customers along with a differentiation in goods and services.
Negative

Work life imbalance : It creates a bad effect on the personal as well as on work life. Always
concentrating on the rivalry companies makes a negative impact on its own organization.
Focus on wrong things : Focusing on the strategies that how another organization is growing to
fast and what policies it is providing makes the own occupation in a risk. If Sainsbury's always
focus on the development strategy of Tesco than it will achieve a bad impact on the industry.
Task 4
Reflection
No one really wants to remember their obstacles in life. In the context of upper summary
and discussion I would like to confront the two challenges and overcome them with the best
understanding from these illustrations. In the above document, it has been described about the
retail market and what kind of challenges they have to face in this sector. While performing this
activities by own it creates a problem to resolve.
Managing the retail company is to difficult and I have to face challenges like focusing on
the rivalry organization models and keeping the cost of the products high which leads me to
receive a big loss. After understanding the Pestle analysis strategy, I make my mind to put the
prices affordable at both sides without getting any loses in share values and economy. In
addition, it also helps me in concentrating on my own retail shop and provide new ideas and
strategies to improve my substances and policies.
CONCLUSION
In this above report, it has been concluded that to drive the business it needs a proper
understanding and justification power to become a successful entrepreneur. In the document,
illustrate about the organization named Sainsbury's, a food retail company. The discussion has
been made on the concept and strategies of growing a business and confronting the positive and
negative challenges in a food retailing and supermarket industry.

REFERENCES
Books and journals
Cai, X., and et.al, 2018. Food retail market structure and produce purchases in the United
States. Agribusiness.34(4).pp.756-770.
Gu, H.Y. and Wang, C.W., 2020. Impacts of the COVID-19 pandemic on vegetable production
and countermeasures from an agricultural insurance perspective. Journal of Integrative
Agriculture.19(12).pp.2866-2876.
Kor, et.al, 2017. How large food retailers can help solve the food waste crisis. Harvard Business
Review.19.
Lagorio, A. and Pinto, R., 2021. Food and grocery retail logistics issues: A systematic literature
review. Research in Transportation Economics.87.p.100841.
Loureiro, S.M.C. ed., 2020. Managerial Challenges and Social Impacts of Virtual and
Augmented Reality. IGI Global.
Moran, et.al, 2020. Associations between governmental policies to improve the nutritional
quality of supermarket purchases and individual, retailer, and community health
outcomes: An integrative review. International journal of environmental research and
public health.17(20).p.7493.
Tan, D. and García, F., 2019. Main group mechanochemistry: from curiosity to established
protocols. Chemical Society Reviews.48(8).pp.2274-2292.
Vijayaraghavareddy, et.al, 2017. Quantification of membrane damage/cell death using evan’s
blue staining technique. Bio-protocol.7(16).pp.e2519-e2519.
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