Tesco: Market Size and Demand for Vegetarian Food in the UK

This report provides a comprehensive analysis of Tesco's expansion strategy within the UK vegetarian food market. It begins with an introduction to market assessment, defining what constitutes a market and emphasizing the importance of selecting the right market segment. The report then focuses on Tesco's specific objective: to establish a strong presence in the UK's vegetarian food market. It identifies the target market, considering demographic, psychological, and geographical factors, such as the elderly population and non-resident communities. The report assesses market size, highlighting the growth in vegetarian food preferences and sales trends from 2013 to 2014. It also examines market trends, noting the increase in sales of meat-free products and the rising number of vegetarian consumers. Furthermore, the report analyzes Tesco's key competitors, including ASDA, Sainsbury's, Morrisons, Aldi, and Lidl, and discusses the strategic groups to which Tesco belongs. The analysis extends to competitor plans, Porter's Five Forces model, and a SWOT analysis to evaluate Tesco's strengths, weaknesses, opportunities, and threats. Finally, the report offers insights into the UK food industry, particularly the demand for vegetarian products.

Task 3
Assess market size and
future demand

Introduction
• The business unit needs to evaluate market
size and trends before expanding its
operations.
• The presentation is going to assess market size
and for vegetarian food in UK.
• It focuses on expansion strategy for Tesco.

What a market consists of?
A market consists of all types of consumers who purchase the variety
of goods and services. A market is sub-divided into many small segments.
These all segment can be considered as a different market. Therefore, it is very
important for every business organization to select the best suitable market
segment in order to increase the demand and supply of the products and
services what they are offering. Moreover, an organization should select the
market considering its size, growth, availability of competitors and many more
things.

Selection of Market
• The main focus of Tesco is to establish its
foothold in vegetarian food market of UK.
• United Kingdom is selected as a market for
Tesco to expand its vegetarian food market
segment.

Identification and selection of the
market segment
• Tesco is a retail company who is expanding its business in UK
by offering vegetarian food products to the customers of the
United Kingdom. In order to start the vegetarian food market
company should focus to sell its products and services to the
old age people who normally faces various health issues. It
should also aim to sell its product and service to the area
where large number of non-resident are living in United
Kingdom.

Contd.
In order to start up the vegetation food market in United Kingdom Tesco
can select the best market; by dividing the big market into small segments.
Company can divide the market on the basis of demographic,
psychological and geographical bases.
 In Demographic Segment company can focus on the age of the
individual. It should focus on the old age people above the age of 45 years
who normally faces various health issues.

Contd.
• In Psychological Segment company should focus on the interest of the
customers. What actually customer want from them. What type of products
they want and how they can be attracted towards the purchase of the
products.
• In Geographical segment, company should focus on the area where large
number of old age people are living and the area where non-resident of UK
are living like citizen of India, Pakistan.
Thus, taking into consideration the all these factors Tesco will be able to
properly flourish its vegetarian food market in UK.

Market’s size volume or value
• Rate of people preferring the vegetarian food products have been
increased from year 2013 to 2014 in the country like UK where large
number of people have started facing various health related problem. Sales
of vegetarian products has also increased because of the arrival of large
number of non-resident who normally prefers to eat vegetarian food
products. Therefore, it can be estimated that the market size of the Tesco
has increased in lieu of selling the vegetarian products.

Contd.
• It is also estimated that market volume of the vegetarian products has
increased with the increase in size of market. Therefore, it can also be
estimated that with the increase in size and volume of the vegetarian
market; value of variety of products of Tesco has also increased. The
reason behind this could be that nowadays people are becoming more
health conscious in regard of which they want to reduce the reduce the
consumption of non- vegetarian products like mutton, chicken and other
related products.

Market trend
• It is found out that market trend of the vegetarian products has shown a
tremendous growth in the UK market. Thus, it is find out that in the year
2013 the sales of meat free products hit the sales by £625m which was
further increased by £657m in 2014. It is also noticed that about 12% of
the UK population are using both the vegetarian and non-vegetarian
products and about 20% of the people between the age group of 16-25
years are self identify. It was also seen that about 53% of the orders in the
vegetarian restaurants has increased as compared to previous year. It is
seen out that order of vegetarian products has increased from 1.7m to
12.8m in the year 2014.

Analyses of market trend
• From the following analyze it is can be concluded that introduction of
vegetarian products in the market has affects the growth of the Tesco.
Introduction of products aid the company to increase its brand image by
increasing its sales. Increased sales will lead the company towards the
market growth. It is find out that the consumption of meat free products
has increased in the areas where large number of old age people and non-
resident are staying. Therefore, at last it can be concluded that introduction
of vegetarian products in the UK market has proved to be beneficial for the
Tesco.

Tesco Competitors
• ASDA
• Sainsbury
• Morrisons
• Aldi
• Lidl