UK SuperMarket Case Study

UK supermarket sector

Competition in the UK supermarket sector is aggressive. According to Tesco, the market front-runner, the ‘UK grocery market was worth £163.2 billion in year 2012 and is forecast to rise to £196.2 billion by year 2017. Price wars and innovation in retailing amongst the ‘big four’ supermarkets (Tesco, Sainsbury’s, Asda and Morrisons) are very common.

In 1996, Tesco launched its electronic business in response to growing customer demand for online shopping. When first established. Tesco.com operated from single office with a ‘handful of computers’, deliveries were completed from a single store, subsequently this time revenue has grown-up from £25m to £1.5bn. Both Asda and Sainsbury’s have followed suit in recent years introducting their own online interactive shopping websites.

Morrisons

Morrisons, the fourth major supermarket chain for a number of years, they avoided establishing its own online website presence. The Guardian(magazine) highlighted that previous Morrisons CEO MR. Ken Morrison who left compny in 2008 was keen to avoid ‘new fangled fancies’, in favour of ‘keeping business simple: shops the same size selling the same stuff to keep costs low and profit margins high’.

Morrison Falling behind

In recent years Morrisons Supermarket has fallen behind its major competitors. In 2013 Morrisons declared worse than expected like-for-like sales, the Yorkshire Post reporting a deterioration of 5.6% compared to the previous year figures, with profit forecasts stated at the lower end of market predictions.