Supermarket Power
THE NATURE OF SUPERMARKET POWER ON THE HIGH STREET AND BEYOND
INTRODUCTION
In this essay I will be outlining the nature of supermarket power and how it affects competing retailers and the impact this has on us as consumers. I will do this by drawing heavily on the learning materials provided to underpin the factors involved.
WHAT IS SUPERMARKET POWER?
It is useful to describe what is meant by the term supermarket power. In the last twenty years, supermarkets have played a pivotal role in redefining our shopping habits. This is due to many factors like convenience, freedom of choice and value for money but it is also down to the economic domination of supermarkets themselves.
The big 4 (Asdas, Morrisons, Tesco and Sainsburys) control roughly 75% of the grocery market in the United Kingdom. (Allen,2009) This is done by using their size and influence on suppliers, who must produce their goods as cost effectively as possible to secure future orders. It is evident that the market share described here has increased greatly, (Allen,2009, p66) states "As the big 4 supermarkets have more than doubled the number of stores under their ownership in the UK since 2000, it seems fair to contend that their economic leverage has grown too".
The supermarkets ability to bring in other lines to satisfy consumer demand has aided this factor. Now when embarking on our weekly shop we can peruse all manner of goods such as, books, clothes and electrical products. Previously this was the domain of more specialised retailers. It can be argued that this is a positive development and is very much in step with giving the customers what they want, on the other hand it is also a fine example of the big 4 dominating the market by their sheer size and buying power.
THE EFFECTS ON THE UK MARKETPLACE
The anti supermarket lobby makes the suggestive claim that every supermarket that opens results in a net loss of 200-300 jobs, as a whole network of local shops and their suppliers is
INTRODUCTION
In this essay I will be outlining the nature of supermarket power and how it affects competing retailers and the impact this has on us as consumers. I will do this by drawing heavily on the learning materials provided to underpin the factors involved.
WHAT IS SUPERMARKET POWER?
It is useful to describe what is meant by the term supermarket power. In the last twenty years, supermarkets have played a pivotal role in redefining our shopping habits. This is due to many factors like convenience, freedom of choice and value for money but it is also down to the economic domination of supermarkets themselves.
The big 4 (Asdas, Morrisons, Tesco and Sainsburys) control roughly 75% of the grocery market in the United Kingdom. (Allen,2009) This is done by using their size and influence on suppliers, who must produce their goods as cost effectively as possible to secure future orders. It is evident that the market share described here has increased greatly, (Allen,2009, p66) states "As the big 4 supermarkets have more than doubled the number of stores under their ownership in the UK since 2000, it seems fair to contend that their economic leverage has grown too".
The supermarkets ability to bring in other lines to satisfy consumer demand has aided this factor. Now when embarking on our weekly shop we can peruse all manner of goods such as, books, clothes and electrical products. Previously this was the domain of more specialised retailers. It can be argued that this is a positive development and is very much in step with giving the customers what they want, on the other hand it is also a fine example of the big 4 dominating the market by their sheer size and buying power.
THE EFFECTS ON THE UK MARKETPLACE
The anti supermarket lobby makes the suggestive claim that every supermarket that opens results in a net loss of 200-300 jobs, as a whole network of local shops and their suppliers is