Impact of Social Media on Sainsbury’s in the Public Retail Sector

This report analyzes the impact of social media on Sainsbury’s, a public retail business organization in the UK. It explores the major challenges faced by Sainsbury’s, its corporate governance structure, and sources of funding.

Unit 4: Public Services
in Contemporary
Society

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Major Contemporary Challenges Faced by Sainsbury’s.............................................................3
Corporate Governance Structure of Sainsbury’s.........................................................................5
Sources of Funding for Sainsbury’s............................................................................................6
Small scale research over impact of social media to the current pandemic................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Social medias are engaging and interactive digital technological solutions through which
the average users and business organisations can create and share content with other citizens and
participate in digital social networking with each other. Social media platforms facilitate the
creation and sharing of ideas, information, career interests and allow for its users to express
themselves to others via virtual networks and communities. Social media has had an enormous
impact on the overall operations of the public retail sector (Mattsson and Andersson, 2019). This
report analyses the impact on social media on Sainsbury’s, which is a public retail business
organisation that was created in 1869 and went public in 1973. Sainsbury’s operates from its
current headquarters in London, UK and has grown to become the second largest supermarket
chain in all of UK, possessing a total market share of over 16%. Sainsbury’s operates over 1428
distinct establishments in UK.
MAIN BODY
Major Contemporary Challenges Faced by Sainsbury’s
Sainsbury’s faces various major and minor contemporary challenges during its operations
within the public retail sector of UK. The most significant and major contemporary challenges
that are faced by Sainsbury’s in the public retail sector of UK are as follows:
Intense competition: Sainsbury’s faces intense competition from the other major business
organisations that also operate in the retail sector of UK such as Tesco, Aldi etc. This intense
competition is one of the most major issue and challenge to the current operational success of
Sainsbury’s, as most of its competitors also conduct their operations towards similar
organisational goals of Sainsbury’s such as increasing their overall productivity and profitability
by increasing their overall customer base and market share metrics. As Sainsbury’s is a public
business organisation, it becomes a significant challenge for it to outcompete privately owned
and operated competitors within the retail sector as these possess vastly greater financial
resources to invest into improving their operations. Social media has also contributed
significantly towards increasing the challenge that Sainsbury’s faces from its competitors. On

social media platforms, many of Sainsbury’s competitors promote and advertise their newly
innovated goods and products to the public and the various discounts and sales that such
businesses offer to its consumers (de los Reyes Jr, 2019). Sainsbury’s being a public business
organisation finds it hard to outcompete its competitors on innovation and discounted sales and
stands to lose customers to their competitors owing to their social media marketing.
Training and development: Another major challenge that Sainsbury’s faces relates to them
making use of social media platforms in order to effectively provide optimum levels of customer
services to their customers within the retail markets. Social media is such a great and productive
place where Sainsbury’s can provide effective customer service to their customers, but this
requires Sainsbury’s to effectively train and develop their own customer representative
employees in order for them to be able to provide optimum levels of customer service to
Sainsbury’s customers up to the standards that are expected of the business organisation. This is
a major challenge as training and developing the customer servicing skills of their employees
consumes various important resources of Sainsbury’s such as financial resources, human
resources, training equipment etc. in addition to the time resources that Sainsbury’s is required to
invest into the training and development of their customer representative employees.
Negative Social Media Interactions: As social media has become an important and essential
platform where the marketing and customer service operations of Sainsbury’s can take place,
another major challenge that Sainsbury’s faces pertains to all their interactions on the social
media, between the business organisation and its customers are required to exclusively be
positive in nature. When the social media interactions between Sainsbury’s business organisation
and their customers are negative in nature, then these have the tendency to attract negative
headlines for the business organisations in the news papers, place the business organisation in a
negative lime light in the public’s eye and also have a significantly bad impact on the brand
value and reputation of Sainsbury’s in the retail industry (Ganapati and Reddick, 2018). This is a
major challenge as many of the times the customers themselves showcase the business
organisation in a negative manner which is a major issue for the business organisation.
Thefts: Another major issue for Sainsbury’s relates to the thefts and shoplifting that occurs in its
retail establishments. This is also another major challenge for Sainsbury’s as it looses productive
goods and products to customers who choose to steal or lift the products off of Sainsbury’s

shelves without acknowledging that they have taken the product without informing and without
making the financial payment for the stolen or shoplifted goods and products. This is a major
problem for Sainsbury’s as although most of its retail establishments are monitored and digitally
recorded by CCTV cameras, catching such individuals with nefarious intentions dynamically in
real time, is immensely hard for Sainsbury’s as it services a vast number of customers daily. For
this issue, social media has been of some help, as the video recorded of customers stealing and
shoplifting the goods and products of Sainsbury’s can be uploaded on the social media platforms,
in an effort to get the local communities to catch and apprehend the convicts who conducted such
nefarious operations within the retail premises of Sainsbury’s.
COVID-19: The current Coronavirus (COVID-19) pandemic has also been quite problematic for
Sainsbury’s. Sainsbury’s has had to close down many of its retail operations as a direct response
to the spread of the Coronavirus pandemic. This has had significantly adverse impact on the
overall operational and financial performance of the business organisation as even now after the
lockdown has subsided, Sainsbury’s finds it immensely hard to safeguard and guarantee the
health and safety of both its employees and customers from the spread of Coronavirus (COVID-
19) (Achilov, 2016). Social media has also exacerbated this issue for Sainsbury’s, as fake posts
on social media platforms about opening of Sainsbury’s premises before they have been legally
mandated by UK government to open are also a major issue, as large masses of customers flock
to the closed Sainsbury’s establishments endangering everyone involved.
Corporate Governance Structure of Sainsbury’s
The ownership and leadership of Sainsbury’s conduct the various distinct operations and
functions of the retail business organisation based on a functional hierarchical organisational
structure. A functional organisational structure divides the organisational structure of
Sainsbury’s on the basis of the various functional areas that Sainsbury’s possesses such as
finance, manufacturing, marketing, distribution etc., with each distinct functional area
conducting its individual operations and communicating effectively with the other functional
areas of Sainsbury’s in order for the retail business organisation to be able to conduct its own
overall operations in a productive and smooth manner (Wirtz, Weyerer and Geyer, 2019). As per
the functional hierarchical organisational structure, all distinct functional areas of Sainsbury’s
have their own designated leadership and heads, who overlook the operations of that particular

department, in order to ensure their particular department is able to operate towards optimum
levels of performance and efficiency and also ensure that effective communication takes place
between their department and other separate functional areas of Sainsbury’s so that the overall
business organisation is able to conducts its operations within the public retail sector in an
effective and efficient manner.
The advantage of Sainsbury’s making use of functional organisational structure relates to
Sainsbury’s being able to group together the employees who possess common experience, skills
and talent together, allowing for such employees to be able to operate with increased efficiency
and contribute effectively towards Sainsbury’s accomplishing its organisational objectives and
goals. On the other hand, the disadvantages of Sainsbury’s making use and operating under the
functional hierarchical organisational structure relate to the fact that such an organisational
structure requires extensive communication between the diverse operational functional areas of
Sainsbury’s such as finance, manufacturing, marketing etc., and should these individual
functional areas of Sainsbury’s fail to effectively engage in communication operations with the
other functional areas of the business organisation, the Sainsbury’s cannot operate within the
public retail sector of UK in a productive and smooth manner (Davidsson and et.al., 2016).
Another disadvantage of functional organisational structure relates to the increased time it takes
for Sainsbury’s to undertake their decision making operations, as various different employees on
the basis of their operational position within the hierarchical chain of command within
Sainsbury’s are required to be consulted for all the decision making operations of the business
organisation, which makes such decision making operations extremely time consuming for
Sainsbury’s.
Sources of Funding for Sainsbury’s
There are various different sources of funding which are available to the leadership and
senior management of Sainsbury’s for fulfilling all of their financial needs and requirements.
These different sources of funding available to Sainsbury’s all possess their own individual
advantages and disadvantages and these have to be thoroughly considered by the leadership and
senior management of Sainsbury’s before they are able to come to a valid, relevant and reliable
decision on which source of funding to make use of for the financial needs and requirements of
the retail business organisation. The different sources of funding through which Sainsbury’s can

procure their required and essential financial resources from the external environments are as
follows:
Crowdfunding: This source of funding allows for Sainsbury’s to procure their required financial
resources from limited contributions of a large number of individual customers through the
internet. The main advantages of using crowdfunding approach relates to the ownership and
leadership of Sainsbury’s being able to set the target figure for their financial needs that are to be
funded by the public (Nuottila, Aaltonen and Kujala, 2016). Another advantage of crowdfunding
relates to it inadvertently promoting and advertising the business organisation to a large number
of individuals within the population. Disadvantage of crowdfunding relates to the fact that should
the financial target for the required funding not be achieved by Sainsbury’s, then the entire
amount that has been collected is returned back to the people who made contributions towards
providing funding for Sainsbury’s.
Debt Financing: This source of funding relates to Sainsbury’s procuring financial resources as
loans from banks of UK. This is the most popular source of funding for businesses. Through debt
financing, Sainsbury’s would enter into a legal contract with a bank, gaining the financial
resources that it requires and promising to pay back the loaned amount plus interest that has also
been agreed upon by Sainsbury’s within a prescribed duration of time. The advantage of debt
financing approach is that it is a relatively easy process with the bank guaranteed to satisfy the
financial needs of Sainsbury’s. The disadvantage of this approach relates to its inflexible nature,
with Sainsbury’s not being able to negotiate the interest or pay back duration at all.
Equity Financing: This source of finance, Sainsbury’s can raise the required financial capital
through the sale of their organisational shares to the public. This source of funding, Sainsbury’s
can make use of angel investors who are highly rich individuals looking to invest their money
into the operations of business organisation in return of the business’s equity or shares. The
advantages of this approach relates to Sainsbury’s being able to procure as much financial
resources as are required (Sarker, and et.al., 2017). The disadvantages of this approach relate to
loss of control of the business’s operations and long term vision.
Funding allocation to different public sector organization

Due to the effects of the COVID 19 the finance from the economy has reduced as there is
no flow of money within the economy as there was complete shutdown for some time
(Bobáková, 2017). Thus, due to this reason mainly the companies were not having much money
for the reviving of the business. Due to this reason the finance was badly required and for this
even the company cannot float the shares of the company. This is majorly because of the reason
that there are not much buyers of the share. This is due to the fact that the people in the economy
are also not having the money to purchase the shares of the company. Thus, in this case the
major source of finance for Sainsbury is the personal capital which is there with the company
and the retained profits which the company has gathered and accumulated in the whole business
life. This will be the safer and cheapest source of finance which the company can get and with
proper control as to how the finance will be used.
In addition to this another major source of finance after this harsh situation of the
pandemic is the taking assistance or donation from the other countries that are in better condition
than the company. This is majorly because of the reason that the effects of pandemic are not
evenly spread rather some of the place are badly affected and some are very less affected. Thus,
in this situation the government of country can take assistance from the other countries that are in
well condition. Then after taking the loan the government of the country can provide it to the
other companies and Sainsbury. Also, the government can provide this in form of loan or some
rebate in the charges or taxes and even in the form of subsidy. Thus, with this it can be said that
the finance or the money is the most essential thing necessary for the revival and growth of the
company after the severe effects of the pandemic (Amogechukwu and Unoma, 2017).
Small scale research over impact of social media to the current pandemic
In the current competitive world the situation is of pandemic that is the COVID 19 which
is the spread of corona virus. This is a very tough and hard situation for every person in the
country and the different types of business as well. This is majorly because of the reason that the
effects of COVID 19 are very disastrous and heart-breaking for the whole world. No country or
state is left unturned with the effects of spread of corona virus. Due to the situation of pandemic
all the countries have taken the step of lockdown that is shutting down the economy for a certain
period of time. This was done as a preventive measure for the spread of corona virus among the
people. Thus, at this time the social media helped the people to a great extent (Ahmad and

Murad, 2020). This is majorly because of the reason that the social media was the only medium
through which the people can take the social media is the medium through which the person can
communicate with one another and can share their views and experience with one another. The
impact of using the social media at time of the current pandemic was very helpful as if the
government of the country had to communicate with the audience then they took the help of the
social media only.
With the help of the content analysis it was more clear that the impact of social media to
the current pandemic situation. With respect to Sainsbury the social media has helped the
business in managing the business after the shutdown of the economy. This is majorly because of
the fact that the company deals in retail products that if food and related products which are a
basic necessity for the person to live. Thus, during the pandemic situation as well the company
provided a variety of services to the consumer with help of the social media and the online
business. This was helpful for the company to provide to the consumer the things which the
consumers are requiring. With the help of the social media the company was able to
communicate with the consumers and it was helpful for the company in understanding the
requirement and needs of the consumer. Thus, by understanding the requirement of the consumer
the company tried to cater to the need of the consumer and satisfy it (Kadam and Atre, 2020).
During the whole study content analysis was used which is a method which helps in
studying the different document and other articles in form of images, videos and audios. The
steps taken by Sainsbury in relation with the controlling of the effect of COVID 19 was
illustrated as follows-

Figure: COVID 19 time plan of Sainsbury.
(Source: Impact of COVID 19’ 2020)
From the above content it can be seen that the company Sainsbury is trying to build the
business after the harmful effect of COVID 19. Thus, for this the first step taken by the company
is the limiting of the product purchasing and this is majorly because of the reason that there are
not much buyer for the goods and services. Further the company provided place for the
employees for being in self isolation and then closed down the cafes and pizza counter and gave
option of only. Furthermore, the company came with the concept of priority shopping for the
NHS and other social worker and closed the standalone Argos store. Also, major focus was laid
on the social distancing and the major focus of company was on the online trading and business
only. Also, for the welfare of the country, the company donated huge amount of money to
Fareshare and Comic Relief Big Night (Tasnim, Hossain and Mazumder, 2020).
CONCLUSION
Through this report, it is concluded that the rise and widespread adoption of social media
by increased number of people in the UK population has had an immense impact on the
operations and functions of the entire public retail sector and on Sainsbury’s as well. This report
analyses the major contemporary issues that Sainsbury’s is facing in the public retail sector of
UK particularly placing focus on the influence of social media. The report also evaluates the

corporate governance operational structure of Sainsbury’s. Further the report assesses the
different sources of funding that are available to Sainsbury’s for their financial needs to
successfully operate in the public retail sector of UK. Finally, the report conducts small scale
research and analyses the impact of social media on the current global pandemic and how this
affects the operations of Sainsbury’s.

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Wirtz, B.W., Weyerer, J.C. and Geyer, C., 2019. Artificial intelligence and the public sector—
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Online
Impact of COVID 19. 2020. [Online]. Available through: <
https://www.about.sainsburys.co.uk/news/latest-news/2020/30-04-2020-prelims >