The UK supermarket industry is a very competitive and profitable industry. It is made up of four main players with significant share of the market, and then various smaller companies who focus on smaller niches in the market such as the bottom of the market discounters and the top of the line speciality stores. It is an interesting market and this report evaluates the attractiveness of the industry using Porter’s five forces model with an insight into how market nicher Waitrose sustains a competitive advantage. Next this report looks at how major player Sainsbury’s successfully competes against its rivals using differentiation strategies, and analyses current consumer trends and problems can effect this industry.
UK GROCERY INDUSTRY
The UK grocery retail industry is estimated to be worth £134.8bn with 95,585 stores. Supermarkets and superstores consist of 6,336 stores with an estimated worth of 97.9 billion pounds, according to the UK Retail Food Sector Market Brief, (2008). The grocery market is concentrated with seventy-five percent market share in the hands of just four supermarket chains. The ‘Big Four’ consist of Tesco, ASDA, Sainbury’s and Morrisons. The market shares of the UK’s supermarket chains are as follows:
UK Supermarket Market Shares
UK Food Sector Market Brief, 2008.
Market leader Tesco, occupies the largest market share and targets the middle market offering value to consumers, providing both economy and up-scale products at very competitive prices. (Bradmore, 2005). Market challenger ASDA is slightly down-market of Tesco competing closely in price and focuses on delivering low prices to customers, and Morrisons competes at much the same level as ASDA. (UK Food Sector Market Brief 2008). Sainsbury’s, also a market challenger, is pitched slightly up-market of Tesco, targeting the premium end of the middle market, the consumers who appreciate good quality products for a slightly higher price.... [continues]
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(2009, 05). Sainsbury's and Waitrose Uk Supermarkets Porter's 5 Forces Competitive Advantage. StudyMode.com. Retrieved 05, 2009, from http://www.studymode.com/essays/Sainsbury-s-And-Waitrose-Uk-Supermarkets-Porter-s-204931.html
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