Analysis of Retail Industry Trends and Sainsbury's Performance

This report provides a comprehensive analysis of the retail industry, focusing on current trends such as omnichannel strategies, personalized retail experiences, the growing culture of immediate response, and the increasing demand for sanitizing products and services. The report uses Sainsbury's as a case study, examining its strengths, weaknesses, opportunities, and threats through a SWOT analysis, and evaluating its external business environment using a PEST analysis. The analysis considers political, economic, social, and technological factors impacting Sainsbury's. Based on the findings, the report offers strategic recommendations for Sainsbury's, including enhancing its online platform with personalized selling experiences, considering strategic mergers, and continuously innovating its products and services to meet evolving consumer demands. The conclusion emphasizes the importance of adapting to the volatile retail industry trends to maintain profitability.

Inquiry Based
Learning

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
Current trends of Retail industry.................................................................................................3
Analysis of organisation using SWOT and PEST frameworks..................................................5
Recommendation.........................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The retail industry consists of selling finished goods to the ultimate consumer by
individuals and organisations. There are various retailers all around the globe including grocery,
department stores, medical stores, convenience stores, electrical stores and other speciality
stores. Sainsbury's is the second largest supermarket chain in the United Kingdom. J Sainsbury
plc is the holding company of Sainsbury's Supermarket Ltd. It holds a 16% share in the
supermarket sector in the entire UK. The retail industry can be classified on the basis of products
and distribution channels. In this report the author will cover the current market trends in the
retail industry along with the analysis of Sainsbury's and how it uses these trends in its favour.
The author will also use an external business environment analysis on Sainsbury's and give
recommendations on the basis of the information enlisted by him (Dolenc and Kazanis, 2020).
TASK
Current trends of Retail industry
The retail industry is going through enormous changes due to continuous changes in
consumer behaviour and their increasingly high expectations. The retail business houses need to
analyse the industry trends in order to evaluate their business and check how successful it is and
what can be done to make it more successful in the future. Some of the key industry trends are:
 Investment in Omni-channel retail Strategies:
Omni-channel is strategical approach which helps the retailers to provide consumers with
seamless shopping experience, even if they are using a mobile phone or a desktop to shop, or
they are buying through telephones and directly going to the store. According to a research an
average consumer owns around 3.64 connected devices which he uses to consult before
purchasing or buying a finished good (Iwasawa, 2021). Consumer can purchase a product by
using one device and reviewing it on another device. Due to the existing of connected devices
the consumer demands a seamless shopping experiences at multiple touchpoints. Most of the
retailers now focus on formulating a strategic policy involving these connected devices, mainly
mobile phones as it enables them to take advantage of one of the most connected devices and get
its help to capture more market and make more sales (Top 5 Emerging Retail Industry Trends,
2021).
 Personalised Retail Experience:

Personalisation is a method which retailers use to provide customers with a more personalised
shopping experience. In this the retailers give suggestions to the consumers which is based on
the taste, preferences, locality, order history and previous searches of the customer. Retailers
create personalised experience for users by interacting with them and establishing personal
relations with them (Sun and et. al, 2020). This can be done by using chat boxes on various apps
and website which increases consumer involvement and interest. Retailers can also used online
and telecommunication based services and text messages. The rise of personalisation has led the
use of more advanced techniques and technologies such as Artificial Intelligence (AI) which
learns from consumer behaviour and preferences and provide them with the product that the
desire.
 Growing Culture of Immediate Response:
Increasingly advancing technologies is making consumers more and more impatient customers in
the retail industry. As per a research, nowadays consumers expects a communication response in
10 minute as compared to older generations who expect a communication response in 10 days.
As a result of change in the nature of the customer behaviour and their increasing need of
immediate services the retailer has to work on their speed and diversification of services along
with its expansion (DeFeo, Tran and Gerken, 2021). Some of these services include: offering
same-day delivery services, presenting and updating inventory in real-time, setting-up delivery-
lockers, restocking stock quickly and providing scheduled deliveries. The incorporation of these
services can prove to be a challenging task as the retailers will need a strong supply chain to
incorporate these.
 Sanitising products and services:
The recent situation of pandemic has resulted in increased awareness among consumers
regarding the use of sanitisers and sanitisation services. The consumers are more concerned
about their health and well-being as a result they are induced to use more sanitisation products
and services. As a result of change in the nature of the customer behaviour and their increasing
need of sanitisers and sanitising products the retailers have to work and produce more sanitising
products like hand sanitisers, spray sanitisers, disinfectant spray etc. Retailers must also provide
products which are made with taking proper safety measures and free from all the impurities
(Putri, Usman and Cahyati, 2019).

Analysis of organisation using SWOT and PEST frameworks
SWOT ANALYSIS:
SWOT analysis is a framework designed to compile the strengths, weaknesses,
opportunities and threats of an organisation or individual (Elisanti and et. al, 2020). SWOT
analysis helps the management of an organisation to evaluate the internal and external factors
affecting the business of the organisation.
STRENGTHS WEAKNESSES
 Sainsbury's has effective management
which takes efficient decisions
regarding the expansion and growth
opportunities of the business. It makes
the right expansion moves which helps
the company to grow at a considerable
rate.
 Sainsbury's has a wide range of
products to offer consumers. There are
different types of customers and
Sainsbury's is able to exploit that factor
and cater to the economy in its own
way.
 Like every other retail brand it is hard
for Sainsbury's too to retain customers.
It faces a lot of brand switching risks
even when it regularly indulge in
customer loyalty programs and
promotions.
 Due to the fast growing retail sector,
growing competition and online
retailers, Sainsbury's sales have
decreased significantly, as a result they
have to cut the profit and sell it on a
lower price to retain customers and
capture more market. This has resulted
in low level of margins.
OPPORTUNITIES THREATS
 Sainsbury's can greatly benefit from
selling and providing their products in
the rural market. Branded daily
products are used even in the rural
areas. This has given a rise to the
supermarket culture even in the villages
and other remote areas. This will be a
great opportunity for Sainsbury's as it
 One of the major threat that Sainsbury's
has is the growing competition and the
already existing competition it has
form the companies which already
exists in the market. Its major
competitors are ASDA, Walmart,
Tesco, Aldi and Lidl. Policies and
decisions made by the competitors of

will increase its market capture and
provide with new customers.
Sainsbury's directly affects the business
of Sainsbury's.
PEST ANALYSIS:
PEST analysis is a framework designed to evaluate the macro or external factors of
business environment of an organisation or individual. PEST analysis helps the management in
strategic planning and management (Reis, 2019). By this the organisation can predict the future
trends and factors which will affect the business, and prepare itself and make necessary changes
in its policy and structure to overcome those barriers.
PEST DESCRIPTION
Political One of the major political factors which affected Sainsbury's was the
Brexit movement. When the United Kingdom voted to leave the European
Union it had severe consequences on the business of Sainsbury's along
with other supermarket chains. Brexit will make it difficult for the
supermarket chains to import and export products from different countries.
Economical There is a continuous increase in fuel prices all over the world. This has
made the transport of goods all around the world more expensive.
Sainsbury's and other supermarkets consider these costs, to cover this cost
the supermarkets increase the price of the products or decrease the profit
margin which affects the overall profitability of the business.
There are a lot of supermarket chains in the United Kingdom including
Sainsbury's, Tesco, Walmart, Asda etc. This implies that there is fierce
competition in supermarket industry. This competition have an adverse
effect on the business of Sainsbury's as it requires the company to minimise
its profits and continuously focus on innovation.
Social Consumer these days are more health conscious and no longer rely on junk
food and unhealthy items. This has resulted in increased demand of healthy
food like shakes, salads and body-conscious snacks. This trend is really
important in the retail industry as analysing the needs and wants of the

customers will help the business to be profitable in the long run.
Technological Sainsbury's has diversified its business and now it provides online
shopping options to its customers. In this current pandemic situation people
like to order food and groceries from the comfort of their home. The
technology proved to be very supportive and useful in the pandemic. It also
helped Sainsbury's to increase its volume and earn more profit.
Recommendation
In the above sections of the report the author has enlisted various retail industry trends
and with their brief analysis, the author also used internal and external business environment
analysis framework to analyse and evaluate Sainsbury's. The analysis framework used by the
author are SWOT analysis and PEST analysis. They helped in assessment of internal factors;
strengths and weaknesses, and external factors; opportunities, threats, political factors, economic
factors, social factors and technological factors of the company (Geijsel and et. al, 2020). By
analysing the above information a few recommendations can be made for the company which
can help it to be more profitable:
 The company has technology in its favour. It has expanded globally, introducing online
portal for shopping and making its products available to consumer remotely. It can
introduce more personalised selling experience on the online platform by providing good
consumer support and chat bot facilities on the application and desktop shopping portal
of the company. It can also introduce Artificial Intelligence (AI) which will help the
company to analyse consumer behaviour and provide customers with the products they
need and want. Sainsbury's can also introduce order and pick-up facilities, which means a
consumer can order online and pick the same from the store or supermarket without any
hassle.
 Sainsbury's had business plans to merge with Asda which did not succeed because the
respective authority feared that there might be a increase in the price of products provided
by both of them to the consumers. They can propose the same plan with an amendment
and promise to have the same profit margin in the products which will prevent both of the
companies to increase their prices solely based on the factor of profit maximisation and

increasing level of margin. Both of the companies will have enough collective resources
which can be used to minimise the production cost and sell their products at a lower price
which will further help in increasing the sale volume and capturing more market,
ultimately earning more profit.
 Consumers nowadays thrive for innovation and newness in everything that thy buy. They
pay for the satisfaction they derive from the products and services. It is truly important
for the companies to satisfy the customers in order to retain them and get new ones and
the key to satisfy consumers is providing them with what they want. Sainsbury's must
continue innovating its products and services. It should introduce new and innovative
products in order to attract more customers. It can further diversify its product range and
introduce more products for different sections of the market. By doing this Sainsbury's
will be able to satisfy its consumers and retain them along with creating loyalty among
them. Sainsbury's will be able to attract more customers as well which will increase its
market share.
CONCLUSION
The above report concludes that the retail industry trends are truly volatile and keeps on
changing, retail businesses has to consider these changes in order to maintain stability and earn
more profit. The report also stated the factors affecting the business of Sainsbury's. These factors
can be classified into two types; internal and external business environment factors. The author
also enlisted some recommendations that can help the business to be more profitable.

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