Strategic Retailing

The objective of your individual assignment is to develop a retail strategy for one of the ‘bigfour’ UK supermarkets (Tesco, Sainsbury’s, Asda, Morrisons), focusing specifically on their offline offering in the UK. You may choose to focus on the business as a whole or on a particular division/format as appropriate. You should provide a full analysis of the company’s current market and competitive position, an appropriate marketing strategy outlining relevant objectives, tactics, and vision, and details of the rationale behind these. You have no budget limit, but should be mindful of long-term profitability Specifically, an awareness of and response to discounter and online competition should be provided. Likewise an awareness and response to wider trends affecting UK consumers shopping habits Market Analysis: Define the market including contextual environmental factors, competitor positioning and consumer trends, etc. Internal Analysis: Define the retailer’s current strategy in terms of competitive positioning, target market and customer perceptions, etc. Retail Strategy: Suggest appropriate recommendations for the retailer for improvedcompetitive positioning (including how this may be defined) Strategy Components: Include relevant strategic components such as USP and differentiation, segmenting targeting and positioning, customer environment and experience, etc Background The UK supermarket sector, until recently, has been dominated by the ‘big four’ (Tesco, Sainsbury’s, Asda and Morrisons). However, their dominance is beginning to subside and the discount newcomers, Aldi and Lidl, have a growing market share and are continuing to attract UK consumers. It isn’t just price that attracts these consumers; the small store size and choice makes the experience easier, whilst the discounters are increasing their store portfolio to make them more accessible (Mintel, 2016). By contrast the big four offer large store formats and greater product choice as well as developing their own convenience store formats, non-food categories and a strong internet presence which can be developed to their advantage in future strategies (Mintel, 2017). Many consumers have responded to this increase in choice by adapting their shopping behaviour including the frequency of their grocery purchases, the channels they use and the number of supermarkets they choose to buy from (Mintel, 2016). “Discounters continue to be the standout channel in grocery retailers in 2016, posting current value growth of an impressive 11% in 2016. Growth was supported by rising consumer price-sensitivity and ongoing expansion in the leading player’s store networks, alongside a growing focus on luxury discounting” (Passport, 2017). With Christmas 2018 trading figures showing Aldi and Lidl growing sales significantly over the festive period, this success appears to be ongoing.In addition, the growth of online retail continues to make inroads. The introduction of AmazonFresh in 2016 now offers a platform for specialists to sell to consumers and may present challenges to traditional supermarkets in the near future (Mintel, 2017). Again Christmas 2018 trading results show significant gains by online retailers, albeit these have been more incremental in the grocery sector.

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