Research Report: Tesco Retail Sector Analysis and Recommendations

This research report offers a comprehensive analysis of the retail sector, with a specific focus on Tesco, a prominent UK-based company. The report begins with an introduction to the retail industry, highlighting its rapid growth and the importance of adapting to changing trends. The main body of the report delves into current trends in the retail industry, such as rising cost pressures and the increasing influence of digital trends like drone delivery and online shopping. It then provides an analysis of the retail industry in the UK, examining key performance indicators. The report utilizes Porter's Five Forces and SWOT analysis to assess Tesco's external and internal environments, respectively. Primary data was collected through a questionnaire to gauge customer perceptions of Tesco's products, innovation, and promotional activities. Based on these findings, the report offers actionable recommendations for Tesco, including identifying opportunities for innovation and growth, focusing on customer satisfaction, and improving marketing strategies. The report concludes by summarizing the key findings and emphasizing the importance of strategic adaptation in the dynamic retail landscape. The report emphasizes the dynamic nature of the retail landscape and provides actionable recommendations for Tesco to enhance its performance and competitiveness.

Research Report

Executive Summary
Retail Sector is one of the most fast-growing sectors in the economy. This sector has
enormous opportunities for the different players in the market. Thus in this way the companies
which are operating in this sector are required to make sure that they can manage their work in
the right manner. Thus in this way this sector ensures that the use of these opportunities is made
by different companies effectively and efficiently. Thus it is important for the companies which
are operating in it to make sure that they stay highly up-to-date with the change in the latest
trends and therefore are able to achieve the goals and objectives set in the future effectively and
efficiently.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Trends in retail industry...............................................................................................................1
Analysis of the organization........................................................................................................2
Primary Data Collection..............................................................................................................4
Recommendations for the company.............................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Retail Sector is one of the fastest growing sectors in the different economies all over the
world. Therefore this sector includes the different types of products which are provided to the
various customers in the world (de Vass, Shee and Miah, 2020). The Retail Sector in U.K.
Consists of different companies such as Tesco, Sainsbury's, Asda, Aldi etc. For this research
report, Tesco has been considered. It is a British Company dealing in providing of groceries and
several other related products and services to the various customers in the market. In this
assignment, a detailed focus will be made on Modern trends in retail, Analysis, Primary Data
Collection through the use of Questionnaire. Additionally, a detailed discussion related to the
Recommendations for the company will be discussed as a part of the project.
MAIN BODY
Trends in retail industry
The retail industry is a very dynamic industry in which there are different types of trends
which can come up regularly (Dixon-O’Mara and Ryan, 2018). Therefore it is quite important
for the organizations which are operating in this industry to make sure that they are able to
identify these trends quickly and therefore make sure that they can adjust effectively and
efficiently to these trends. One of these trends is Cost pressures rising.
This trend has taken place because of increase in the level of costs which has thus put an
enormous pressure on the industry (Filimonau and Gherbin, 2017). Therefore in this way the
organizations like Tesco have seen an increase in their overall level of costs due to which they
had to increase the prices of their different products so that the level of profits can be covered up
without problems and issues. The prospective solution for this problem can be Investing in
innovation.
Investing in innovation means that the companies operating under the retail sector have to
make sure that they have to regularly make use of innovative approaches, techniques and
methods so that they are able to innovate in the right manner. (Jaravel, 2019). Therefore when
the companies invest in innovation this can help a lot in ensuring that the overall goals and
objectives can be attained. Therefore Tesco is required to make sure that the use of innovation is
made correctly because in this way the company will be able to ensure that it can put the impact
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of increase in the level of costs away and ensure that the particular goals and objectives can be
attained in the future.
Furthermore, the last few years have also seen a rise in the digital trends in this industry.
These trends like Drone Delivery for the products, Rise of the use of online shopping etc. Drone
Delivery of the products is the digital trend in which the consumers will order the goods on the
mobile application and the goods be delivered to them through the use of Drone. Online
shopping is a trend in which the consumers order their goods online so that they can receive
them at their convenience. This trend has picked up pace because of the availability of online
sites 24 * 7 for the consumers.
Therefore it can be said that the retail industry in U.K. Has a lot of potential and therefore
will be able to ensure that it can contribute a lot to the increase in GDP growth of the economy in
the future (Kjellberg, Hagberg and Cochoy, 2019). Thus it is essential for the retailers in U.K. To
stay focused and therefore make sure that the attainment of goals and objectives can be done
effectively and efficiently.
Retail Industry Analysis in U.K.-
The Retail Industry has a significant share in the market of different countries. In U.K.
Also, it has a particular share in the market. Some of the main points regarding this industry are
explained as follows-
 In September 2020, the retail sales increased by 1.5% when compared with August.
Therefore in this way it can be said that the retail sector has witnessed a recovery after
the impact which was created by the COVID-19 pandemic (Mohr and Batsakis, 2018).
 The proportion of the online sales was 27.5% as compared to 20.1% in February. This
means that the people are preferring online mode of shopping as their preferred shopping
mode as compared to offline mode of shopping due to the impact which has been created
by the COVID-19 pandemic.
Analysis of the organization
External analysis of the organization can be done by ensuring that the use of the different
types of models can be made in the right manner to obtain the desired conclusions as well as
recommendations (Nash, 2019). Thus for this purpose the use of Porter's 5 forces will be made.
Porter's 5 forces-
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 Competition in the industry- This refers to the power of a force regarding the level of
competition within the industry. In the context of Tesco, it has a high power because in
the retail sector a lot of competition is present which can therefore lead towards the
organization having to adjust effectively accordingly.
 Potential of new entrants- This means the force generated by the new entrants within
the organization. In Tesco, this has a high power because the retail industry has a lot of
scope for the new players in the market which can thus force the company to consider
reducing the prices to match the level of competition.
 Power of suppliers- This refers to the force which is created by the suppliers in the
market. In the context of Tesco, this force has a low power because the retail market has
a presence of lot of retailers and thus no particular supplier is able to exert monopoly in
the market.
 Power of customers- This means the force which is created by the different customers in
the market. For Tesco, this force has a high power because the customers in the market
can influence the prices which are set by the company.
 Threat of substitutes- This refers to the force which is created by the influence of
substitute products in the market. In the context of Tesco, this force has a high power
because the customers can shift towards these goods if they find out that the branded
products of the company are priced higher.
For the purpose of carrying out Internal analysis the organizations can make use of different
types of models (Oliveira and Ramos, 2019). One of them is SWOT analysis. The analysis in the
context of Tesco is as follows-
SWOT analysis
Strengths Weaknesses
 Tesco is a company which has a large
customer base which can be targeted so
that the enhancement of overall profits
can be made by the company.
 Tesco makes the use of Creativity and
Innovation which lets it provide the
different types of goods to the
 Tesco is weak in the execution of some
of the marketing strategies which are
framed by it and therefore in this way
this can create different types of
difficulties for the company.
 There has been an increase in the
overall costs of the company which
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customers which can ensure a higher-
level of satisfaction for them.
therefore leads towards a decrease in
the overall level of profits.
Opportunities Threats
 Tesco has to make sure that the use of
opportunity of expanding in different
countries in the world can be made to
enhance the profits in the future.
 Tesco has to ensure that the opportunity
of aggressive marketing strategies is
made so that the different types of
customers can be targeted.
 Tesco faces threat from the higher-
level of competition which is present in
the market which can create an impact
on the overall level of profits of the
company.
 Tesco faces a threat from the increase
in the overall tax rates which are not
only increasing the costs but also
leading towards a decrease in the
overall level of profits.
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Primary Data Collection
Primary Data Collection can be done by the different organizations by making the use of
different types of methods (Roy and et.al., 2018). The use of Questionnaires, Surveys etc. can be
made for this purpose. Questionnaires will be used by Tesco to gather primary data-
Questionnaire
Question 1- Do you think that Tesco offers the branded products which are required by you for
your different types of needs and requirements?
Answer-
Yes- 12
No- 8
Interpretation- 12 out of 20 respondents state that Tesco is a company which offers them
branded products. The remaining 8 respondents state that Tesco does not offers them branded
products.
Question 2- Do you think that the products provided by Tesco are good in the quality which
they offer to the different types of customers?
5
1 2
0
2
4
6
8
10
12
14
Column A

Answer-
Yes- 14
No- 6
Interpretation- 14 out of 20 respondents state that the products which are provided by Tesco to
its customers are good in quality. The remaining 6 respondents state that the products of Tesco
are not so good in quality.
Question 3- Do you think that Tesco is good in adapting effectively to the Innovation in the
market?
Answer-
Yes- 16
No- 4
6
1 2
0
2
4
6
8
10
12
14
16
Column A

Interpretation- 16 out of 20 respondents think that Tesco is good in adaptation towards
Innovation in the market. The remaining 4 out of 20 respondents state that Tesco is not good in
adaptation towards Innovation in the market.
Question 4- Do you think that Tesco is efficient in the adaptation of new innovations?
Answer-
Yes- 18
No- 2
Interpretation- 18 out of 20 respondents think that Tesco is efficient in adaptation of new
innovations in the market. The remaining 2 respondents think that Tesco is not efficient in
7
1 2
0
2
4
6
8
10
12
14
16
18
Column A
1 2
0
2
4
6
8
10
12
14
16
18
20
Column A

adaptation to new innovations in the market.
Question 5- Does Tesco brings out promotional schemes for its different customers through
Discounts, Sales Discount Offers etc.?
Answer-
Yes- 18
No- 2
8
1 2
0
2
4
6
8
10
12
14
16
18
20
Column M