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Supermarket Market Analysis

{text:bookmark-start} {text:bookmark-start} {text:bookmark-start} {text:bookmark-end} {text:bookmark-end} Executive Summary {text:bookmark-start} {text:bookmark-end} {text:bookmark-end} In the UK, the supermarket and superstore market continues to grow. In 2002, retail sales of food through supermarkets and superstores reached an estimated £83.68bn, a growth of 5.1% on the previous year. {text:bookmark-start} {text:bookmark-end} The market is composed primarily of major chains, with outlets nationwide. Alongside these are smaller operations with a traditionally regional bias, although most of these chains are currently expanding nationwide. In addition to these are the limited assortment discounters (LADs). In general, these are operated by European firms and offer basic food products aimed at the lower end of the mass market. {text:bookmark-start} {text:bookmark-end} In 2002, the threat of a slowdown in consumer spending contributed to a renewal of competition on price. The major companies are also carrying out large-scale store refit programmes, in addition to the expansion of outlet numbers. Smaller-format stores are becoming more frequent, resulting in increased competition with smaller, independent retailers. Supermarkets are expanding further into the convenience market. This is a further means of securing customer loyalty, and comes in a year when customer-loyalty schemes have been rejuvenated. {text:bookmark-start} {text:bookmark-end} Wal-Mart's acquisition of ASDA Group Ltd in 1999 has seen the company's stores offer a greater range of non-food products — a move that has been followed by Tesco PLC. Most of the major multiples are incorporating rising numbers of non-food lines into their future development plans as a means of competing with Wal-Mart. Larger superstores are increasingly moving away from traditional, basic food lines to include a wider variety of products and services. {text:bookmark-start} {text:bookmark-end} As store refit programmes...