The UK unemployment figures are an important aspect of the economy for Asda to watch as fluctuations can hugely effect supply and demand, impacting future sales. Higher unemployment, means Asda will see a greater demand on lower priced goods. Asda promotes its self as being a 'low priced' retailer, so, it may also be fair to expect an influx of new customers increasing demand further. Reacting quickly to a change in the economic climate can increase the chance of gaining market share. Utilising their immense buying power, Asda can demand lower cost prices from suppliers, facilitating demand from an expected shift in consumer buying. Considering international manufacturers, where the GBP proves particularly strong may also be one way of achieving higher profit margins. Social and Cultural
Management considering a particular location for a new Asda store must measure the concentration of the local market and consider Social and Cultural forces. They can help determine if an area is understored and demand is present. Statistics of particular interest are likely to be, age ranges, population density, income ranges, level of car ownership and local transport links. Use of gravitational models will help determine the ‘pull’ of a store location. Huff’s (1963), is one such model and aims to predict this. The model calculates the probability a shopper is likely to visit our new store against local intertype retailers in its strategic group. Retailers within Asda’s group are likely to be Tesco or Sainsbury’s. In addition, analysing the demographic and cultural make up of the area should provide good indication of products and services best suited for our new store. For example, if our considered area had recently had a high level of Eastern Europeans settle then incorporating a generous ‘world foods’ section within our assortment would make sense. However, if the area had an very low level of ethnic diversity there would be little demand and focus elsewhere would prove more profitable.
The introduction of Smart-phones in recent years has given customers power to access price comparison sites while in-store. Potentially this trend poses a huge threats for Asda “with these devices, customers have all of the power of the Internet at their fingertips to enable them to shop smarter” (Mobile Commerce Daily,2011) Potentially this trend poses a huge threats for Asda. An increase in store waste, particularly of perishable goods as well as loss of sales to rival retailers. Additional pressures to control costs, namely wages, to ensure the store remains profitable despite loss in sales. Political and Legal.
Asda sell a range of tobacco products as part of their supermarket assortment. These products are usually sold from individually manned Kiosks, separate from the main store. In an effort to address the problem of young people taking up smoking, government are forcing retailers to cover tobacco products out of view with metal roller shutters. Other measures include a raise of the legal purchase age of such products and further...