Report on Current Supermarket Trends, Tesco Performance, and Strategy

This report provides a comprehensive analysis of current trends in the supermarket sector, focusing on Tesco's performance since October 2015. It examines the competitive landscape, including the financial performance of Aldi and Lidl. The report includes a SWOT analysis of Tesco, identifying its stren...Read More

Current
Supermarket trends

TABLE OF CONTENTS
•Introduction
•Current trends in supermarket sector
•Tesco performance since October 2015
•Current Financial performance of Aldi and Lidl
•SWOT analysis of Tesco
•Recommendations to Tesco on regaining market share and profit performance
•Conclusion
•References

INTRODUCTION
Supermarket sector is one of the leading industry where huge number of customers and others are engaged in
order to carry trade and transactions. Supermarket sector is a part of retail industry where trends are given
preference in order to attract maximum number of customers. In this report, various market trends in
supermarket and performance of Tesco in such segment since 2015 will be evaluated. Further, financial
performance of Aldi and Lidl as well as recommendations to Tesco will be provided in order to gain adequate
market share and improve profit performance in respective industry.

CURRENT TRENDS IN SUPERMARKET SECTOR
In order to have maximum reach to consumers, organisations are
adopting innovative techniques and procedures in order to sustain in
competitive environment. It is necessary to meet with changing
expectations of customers and deal with other related barriers in the
market. Due to worldwide lock down in times of pandemic has
increased need of conversion of offline operations into online based
operations so that organisational profits and existence will not be
harmed.

TESCO PERFORMANCE SINCE OCTOBER 2015
Since 2015, Tesco has been committed towards customer satisfaction and expectations in order to
enlarge its market share. Due to various market forces and intense competitive environment, Tesco
faced huge loss of £425m following accounting scandal and price war in retail sector. Tesco CEO
Dave Lewis stated that second half of financial year 2015-16 was likely to be year zero from
prospective of sale and revenue generation. Also there is increased sale in Asian countries and central
European. Loss of profits was faced by company due to increase in competitive environment and their
pricing strategies which are attracting customers and therefore Tesco faced diversion of its customers.

CURRENT FINANCIAL PERFORMANCE OF
ALDI AND LIDL
Aldi and Lidl is a supermarket store which is headquartered in
Germany. It has expanded its operation from Germany to several
parts of world. It is operating in UK with a good range of stores. It
has achieved rise in market expansion on grocery from about 5
percent. It became of the leading supermarket store in UK with rise in
its sales and profit- margins. As it gained recognition across UK,
various other supermarkets suffered a downfall in their market share
due to rise of new competitor.

SWOT ANALYSIS OF TESCO
Tesco is one of the known organisation in UK in retail industry. It has huge customer base due
to which it has good brand image across UK. It was established in 1919 by Jack Cohen. Being
large supermarket chain, it consists of different strengths, weaknesses, opportunities and threats.
Such Factors in reference to Tesco are discussed through SWOT analysis as given below:
Strengths
• Largest supermarket chain in UK
• Higher Market share
• Diversified in different countries

WEAKNESSES
• Accounting Scandal
• Failure in Japanese market and America

OPPORTUNITIES
• New Emerging market: Even Tesco has been already working over large platform, there are also various
emerging markets such as Indonesia, south Korea in order to expand market.
• Online shopping: In times of increasing awareness of technology, Tesco has evolved its operations by
adding e-commerce and mobile phone application for online shoppers for its target audience.

THREATS
• Supermarket competitors
• National economic crisis

RECOMMENDATIONS TO TESCO ON
REGAINING MARKET SHARE AND PROFIT
PERFORMANCE
In order to regain market share and profit
performance by Tesco, following recommendations
are being provided:
• Modification in marketing strategy
• Innovation
• Lowering prices
• Strengthen customer relationship

CONCLUSION
Supermarket sector is one of the growing segment which requires adoption of various techniques in order to
compete with relevant competition in the market. In this report, it is concluded that Tesco is a market player
which holds significant place in retail industry. Although it is one of largest operating organisation, it needs
to adopt strategic techniques in order to promote advancement in market share and increment in profit-
margins for long lasting term. Though there are various competitors in retail industry, Tesco has to adopt
customer oriented schemes in order to hold maximum customers. Also Swot analysis of Tesco has been
provided in order to analyse its internal and external factors.

REFERENCES
Books and journals
• Adam, A., Jensen, J.D., Sommer, I. and Hansen, G.L., 2017. Does shelf space management intervention
have an effect on calorie turnover at supermarkets?. Journal of Retailing and Consumer Services, 34,
pp.311-318.
• Eiza, M.H., Cao, Y. and Xu, L. eds., 2020. Toward Sustainable and Economic Smart Mobility: Shaping
the Future of Smart Cities. World Scientific.
• Hökelekli, G., Lamey, L. and Verboven, F., 2017. The battle of traditional retailers versus discounters:
The role of PL tiers. Journal of Retailing and Consumer Services, 39, pp.11-22.

Online
• Tesco profits tumble by more than half, 2015 [online] available through <
https://www.theguardian.com/business/2015/oct/07/tesco-profits-more-than-halved>
• TESCO SWOT Analysis, 2020 [online] available through <
https://www.marketingtutor.net/tesco-swot-analysis/>