Feasibility Study of IA 24/7 Shop: UK Grocery Market Analysis

This feasibility study examines the potential for establishing an IA 24/7 grocery shop in the UK, specifically targeting Southampton. It begins with an introduction to the UK grocery market, highlighting its size and opportunities. The study then delves into the macro market, analyzing political, economic, social, and technological factors influencing the grocery industry, including the impact of Brexit, GDP fluctuations, changing consumer behaviors, and technological investments. It further investigates the macro industry, focusing on the competitive landscape and the rise of discount giants. The micro industry section details the shop's location strategy, emphasizing convenience through online ordering and home delivery. The financial aspects cover start-up costs, including initial investment and payback period, and break-even analysis. Finally, the report offers recommendations based on the findings, emphasizing the skills and knowledge gained during the study. The study concludes by underscoring the importance of considering the macro and micro environments, and the financial implications of the venture.

I A 24/7 SHOP

Introduction
• The UK market with regards to grocery in the supermarkets and
provides lucrative opportunities.
• UK has more than 90000 grocery stores employing more than 3
million people.
• Establishment of IA 24/7 will offer grocery products in the UK and
specifically in Southampton where the is a growing market for
agricultural products.

Macro Market
• Political-a substantial percentage of food bought by consumers in the UK faces the risk of disruption following a
no-deal Brexit scenario.
• More than 60% of all fresh food is imported mainly from the European Union.
• . It has been found out that 80% of the shoppers in the UK are skeptical about prices with regards to
supermarket food in the case of a no-deal Brexit.
• Economic-Using 2014 as the base year, GDP had declined from 3022.83 in 2014 to 2622 in 2017.A declining GDP
translates to a fall in consumers’ disposable income.
• Social-The social trends impact cooking and eating behaviors with the inclusion of the increasing number of
women working, rise in the number of households for single people, increased exposure to exotic cuisines and
increase in demand for luxury time. Following the post-war epoch, a substantial amount of money was spent on
foods in the UK and has been on the rising since then.
• Technological-Significant investment in the development of technology in the food industry is perceived as a
luxury as the sector entails small and medium-sized enterprises that may not afford such substantial investment
expenses. . Leading supermarkets in the UK such as Tesco and Sainsbury’s have relied on technology to establish
an online retail enterprise that has enabled such supermarkets to improve their share of the market as well as
profits.

Macro industry
• The grocery industry has become competitive recently and is a perfect
illustration of oligopoly developing to become more competitive.
• the increasing strength of discount giants such as Aldi and Lidl, the
have led to shaking up of the market and diluted the former oligopoly
that was enjoyed by giants such as Tesco and Sainsbury.
• From the consumers’ side, it has become good news due to reduced
prices, small profit margins and a bundle of incentives from the
supermarkets aiming to maintain their share of the market.

Micro industry
• The I A 24/7 shop will be located in small towns across the UK and
also in major towns; this will ensure that it caters for the needs of
people who are from large cities that have supermarkets bringing the
services to the door of most consumers.
• I A 24/7 will provide convenience as customers will have the option of
ordering online and having deliveries delivered in their homes at a
small fee to cover transport costs.

Finances
• One strength associated with this venture is that it requires less than
£ 1 million to start from scratch.
• Approximately 1,000,000 will be needed for the start-up to fill the
stocks of mainly grocery products.
• The payback period has been capped at four months; however,
through the break-even analysis, the break-even is 19 months with
annual revenue of £ 3,780,000.00.

recommendations
• It is through this feasibility that I have to note of the elements and
resources required for a start-up. While some parts such as the
finance proved difficult, others such as the macro and micro were
fascinating, and the course itself has imbued me with skills and
increased my knowledge regarding start-ups.