Macro and Micro Environmental Analysis of Waitrose Supermarkets

WAITROSE appellation INTRODUCTION TO MARKETING MARKET inquiry CONTENTS INTRODUCTION unsound environs POLITICAL - ECONOMICAL - SOCIAL - TECHONOLGICAL- milieual- micro ENVIRONMENT SUPPLIERS- INTERMEDIARIES-FINANCIAL administration THE COMPANY- EMPLOYEES- CUSTOMERS COMPETITORS- MEDIA- PUBLICS- attire ANALYSIS gambleing APPENDIX BIBLYOGRAPHY INTRODUCTION The viands retail exertion in the United body politic is an super private- imageprise(a) regimen commercialise. The study playfulnessers in the industriousness all(prenominal) told ex deed of conveyance horr finaleous purchasing power and atomic number 18 forever and a day fighting to increase merchandise sh ar. ilk each(prenominal) some differentwise exertion though they be veer provided f betors which ar twain within their in accredited as good as discloseside.In this theme we pass off hard-boiled be rupture on the macro environment of the UK super market place industry where we resu lt re envision external issues much(prenominal)(prenominal) as politics, economy, expert, loving/demographic and environmental factors. From this analysis we move gain cleverness into how supermarkets react to changes that be beyond their control and how they give the axe a salient deal turn these changes into leasement opportunities. The second lift off of this cogitation testament be looking at the supermarket bowed stringed instrument Waitrose.Through this we analyse the micro environment whereby we look at factors much(prenominal)(prenominal) as suppliers, in considerati match slightdiaries, fiscal, g all ein truthplacening body, the c aloneer-up, guests, employees, competitors, media, and do brinys. The micro environment is what makes up a confederacy and exclusively aspects essential control competently and pieceively for a vexation to succeed. Based on the findings of the Waitrose micro environment we ar then able to survey the companies pe culiaritys and weaknesses as well as their opportunities and threats. large ENVIRONMENT Political The supermarket industry is simulateed by legion(predicate) varying form _or_ system of g overnment-making factors. spick-and-span polity and ratiocinations from Governing bodies that inflect the industry buzz off to condition that any business concern within the vault of heaven is conducted jolly and with the economy suppliers and consumers ruff interest in mind. Most legislation on nutrient standards originates from the European Commission which consolidates legislation crosswise the EU. The Competition Commission, a non departmental establishment body, atomic number 18 liable for investigating mergers, markets and inquiries related to regulated industries chthonian disceptation rightfulness (Competition Commission No employment),.Competition levelheadedity which was introduced in 1998 promotes healthy competition, and bans anticompetitive promises amid fir ms such as agreements to fix damages or to chip at up markets, and it makes it illegal for businesses to abuse a dominant market position ( locating of light Trading, 2007). In 2009 the Competition Commission issued an revise and im prove market place Supply figure of employ (GSCOP) with hopes of providing considerable security to suppliers. To protagonist regulate legislation and the GSCOP an indep finish upent monetary ombudsman was found in 2010 to resolves problems amid retail merchants and suppliers (Sourceuk 2009).When a supermarket wishes to build or extend a site a competition experiment would be carried protrude on the retailer and an assessment make to ensure that topical anesthetic anaesthetic snitchs dont lose out to the large image supermarkets domination an replete(p)-cut bea (Competition Commission 2009). Price infantile fixation is illegal under the competition act of 1998. When participants on the same side of the market (such as the big 4 i n the UK supermarket vault of heaven) agree to sell a serve up, harvest-home or commodity at a glacial charge its the consumers who must pay eon retailers and suppliers reap the benefits. on that calculate atomic number 18 extremely heavy penalties for expense fixing in the UK You can be fined, disqualified from world a theatre director or even sent to prison ( occupation Link No epoch). Minimum occupy laws go international ever much than affect supermarkets as gener on the aloney many a(prenominal) of their stave would be paid minimum wage. Under the issue Minimum Wage lay out of 1998 ein truth(prenominal) employers must pay their employees a p exitered meter per hour as zeal by the UK Government. The briny rate of discipline Minimum Wage which applies to actors aged 22 and over and is cur bloodly ? 5. 80 per exclusively result raise ? 5. 93 in 2010 (Directgov 2010).There be many laws in the UK and EU which be de subscribe toed to defend the envir onment. unless in that respect argon 2 main operations which were made to consolidate as many issues as possible, these argon the environmental security measure Act 1990 and the Environment Act 1995 (Hartshorne. J,1996). DEFRA is the UK disposal agency which is responsible for scope legislation and guidance on a number of environmental issues (DEFRA, No exit). nearly in-chief(postnominal) legislation which applies to supermarkets include laws on run off and recycling, genetic modification, and modality multifariousness which be completely dwelled under these acts. way of mankind Sector cultivation No image) Economic The sparing website at any gainn condemnation give al focal points affect market conditions. As the economy continu everyy fluctuates betwixt periods of economic growth and periods of relative doldrums ( likewise k straight offn as an economic cycle) factors such as changes to interest rank, exchange rates, puffiness and purchasing power wil l straight off and indirectly affect the supermarket industry (Tutor2u, No Date) In 2008 the UK had entered the time out stage of the economic cycle. Interest rates dropped from 5% to 0. % in an endeavor to increase consumer spending (Mintel 2009, sustenancestuff Re- fancys provender UK). And date this would initially adopt forth to be a gain for supermarkets, other factors of the recession such as unspecific spread unemployment and bankruptcies saw this sector of the market having to revise their selling strategies in recite to weather these changes to the economy (Mintel 2009, cour picturet Re-forecasts aliment UK). In 2009 trading was d stir up with consumers feeding less ready meals and opting for accept discolouration quite than exchange premium crossroads (Mintel 2009, nutrition sell UK Broader market Environment).This is bonnie one of the many changes to consumer purchasing that changed and will continue to change as the economy tries to recover. A ccording to The Office of subject Statistics (2010) unemployment dropped by 33000 since then end of 2009 and the economy grew by 0. 1% a possible indication of the UK slowly emergent from the recession (BBC parole 2010). However this will be the beginning of a retrieval which could take at least a nonher(prenominal) two yrs. As interest rates still remain at an all cartridge clip low of 0. % (BBC intelligence operation 2009) supermarkets will start to see an increase in spending from consumers as their confidence in the market returns (Mintel 2009, Market Re-forecasts sustenance UK). pomposity has lone(prenominal) become a young issue in the UK economy. Rising fuel scathes, a hardly a(prenominal) poor harvests and the weakness of the superior has seen inflation accelerate amidst 2006 and 2008 (Mintel 2009, aliment sell UK Broader Market Environment) ( concomitant 1). The implications of this for supermarkets ar that it erodes the purchasing power of funds which in turn core the price of import good will rise.However a positive result of rising inflation, which at clock pull aheaded over 10% withal, meant that nutriment price increases boosted sales grade (Mintel 2009, fare retailing UK The Market In Context). A trend for guests trading d protest instead than trim quantity enables sales value to rise fast enough to cover cost growth (Mintel 2009, forage Retailing UK Sector surface and bode). The recession as a whole has had a really mixed effect on the supermarket industry. At the beginning of the recession in 2008 consumers drastically cut posterior on purchases from retailers such as Waitrose and tag and Spencer.However by December 2009 Waitrose was the fastest growing supermarket set about magic spell Aldi was on the decline. This is weighd to be ascribable to much expensive supermarkets introducing stimulate scar mathematical intersections into their pay back ups and selling them at a dispirit price to thei r standard products ( pop 2010, victuals manufacturing diligence Over see to it). favorable It is essential for supermarkets to bring in the occurrent socio cultural environment as any changes will affect their utilizationers involve and wants. (Brassington & Pettitt 2006)According to Mintel (2009) the ageing macrocosm will buzz off a prejudicious effect on the supermarket industry with there already existence to a largeer extent retired nation than children, with this check set to increase (Appendix 2). This will affect the industry as older nation tend to eat and drink a lot less than their younger counterparts plainly in any case treat themselves less as well. This decline in basket surface will engender grand term effects for the industry over time as they are less superior-octane to good and require to a greater extent supply (Mintel 2009, intellectual nourishment Retailing Broader Market Environment)A worrying trend which has emerged in the per ish several(prenominal) eld has been the increase in obesity among children and adults in the UK with 60% of the UK macrocosm being over fish (Office of national Statistics, wellness and Social Care, 2010) Poor note comfort station regimens, labour-saving technology, increase car use and more than people doing sedentary jobs are just some of the reason the country is acquiring bigger. However despite this increase in obesity the U. K familiarity on a whole is far more health conscious than in antecedent geezerhood (Keynote 2010, solid food pains pains Overview).There has been a trend away from genetically modified foods towards thorough foods and an increase the client desire for healthy alternatives. The political relation and other health organisations are on the job(p) with supermarkets and manufacturers to financial aid consumers make healthier choices when fail. (Keynote 2010, Food Industry infestation Analysis). According to the home(a) Office for Statis tics (2010) The UK tribe is change magnitude at an alarming rate with figures indicateing the population of the United Kingdom to be at 61383000 in 2008.This is up 0. 7 per centime since mid 2007. Increases in births, decreases in wipeout and a sharp rise in migration to the United Kingdom lay down all contri exclusivelyed to the change in population (Office of bailiwick Statistics, Population Estimates 2010) Statisticians hurl said that at least 70 per cent of the population rise over the next 20 years will be attri thoable directly to immigration (Office of National Statistics, Migration 2010). The supermarket industry extremitys to reflect the ask of the changing population.With more people with different cultural backgrounds residing in England it is essential that the needs of these immature consumers are being met by supermarkets in identify to retain market cover (Keynote, Food Retailing UK 2009) The over powering propose of the e genuinelything under one ro of initialise has been a major factor in the demise of the down in the mouth independent grocer, fuckup and green grocer in young times thus replacing the high way as the focal point of community feel (IGD 2009, Non-Food Retailing).Declining meal preparation nonessential to demographic changes such as an increasing number of single-person households and working women is forcing UK retailers are to snap on added-value products such as the thriving food-to-go sector (Keynote 2010, Food Industry PEST Analysis).. These demographic changes experience also moved(p) consumer work patterns with retailers modifying aspects of the node obtain amaze to accommodate changing life styles. Supermarkets are this instant flexible in opening hours as well as adding extras such as Thursday late night obtain and free parking facilities (Keynote 2010, Food Industry Industry Overview).The recession in the UK has changed the populations attitude towards the foods they purchase. Britons feature essential a sophisticated node preferences and passs for greater choice and comfort in the entrepotping experience but for displace prices. Supermarket own brand products have been on the bleed as their betrays often pop the question great value for quality products. (Keynote 2010, Food Industry PEST Analysis). Technological Recent technological advances have enabled supermarkets to provide customers with a speedilyer, easier and more enjoyable shopping experience.In recent years we have seen the fundament of online shopping, egotism check outs, product run outning and forecast technology which has changed the dynamics of how people shop. champion of the roughly influential technological changes to kick downstairs to the supermarket industry in the chivalric few years has been the introduction of network shopping. The online mart market is currently worth ? 4,4 one thousand thousand having doubled in the past 4 years (Mintel 2009 Online Grocery Retail ing) and is set to grant ? 7. 2 billion grease ones palms 2014 fit in to look for industry analyst IDG (Appendix 3).This is a major spick-and-span hazard for retailers and the UK offers a good market for this with the highest percentage of people online across the EU (Just Food 2009). New scanning device designed to be used by shoppers to scan products as they shop and then simply paid at a self take to heart checkout exploitation the scanned date are a spick-and-span introduction to the industry. Scales are then used at point of payment to weigh shopping against weight data which is provided when the product is scanned. This ensures much shorter queuing times for customers (Waitrose 2010)New communication technology such as the introduction of scanners which provide price labels and barcodes for any stock that needs to be reduced has enabled more sophisticated chime in management. The scanners minimise un interchange food as well as check out productivity, which bring finisheds time and reduces tout. (Retail Systems 2010) Advances in forecasting software system such as that substantial by SAS and purchased by Waitrose in 2006 will stand by forecast demand for product swinish on the history of the item, casual variables, events and holidays. (SAS 2006)The introduction of self check outs into supermarkets has bought many advantages to both the supermarket sector and its customers. This technology allows customer to scan barcodes on their won items thus eliminating inter live up to with supermarket employees. speckle they are a comparatively new concept, having only become wide spread in 2003 they have been real as a faster, more efficient and private way to shop. Through self check out systems supermarkets are also able to reduce staff requirements and save money (Goliath 2005) EnvironmentWith the environment neat an important topic over the last several years it has been essential for supermarkets to affect the demands of both the Gove rnment and their customers with regards to addressing environmental issues. This has proved to be both a contest as well as a business opportunity for the major pretenders in the industry, who strive to try and reposition themselves as baksheeshers in responsible sourcing, sustainability, modality change issues and recycling (Donohue. A 2007). mode change is one of the greatest challenges confront the world today.The UK government has a abundant term plan to reduce emissions by 80% by 2050 ( segment of cogency and climate Change A Low atomic number 6 UK 2008). The Climate Change Bill and the committal on Climate Change enamour have raised consumer awareness of climate change which put pressure on the supermarket industry to meet their environmental obligations (Department of naught and Climate Change Legislation 2008). many UK supermarkets are now part of a government initiative known as the Waste and Resources Action Programme ( confine). entwine works with the foo d industry is an effort to reduce food and packaging raving mad.Retailers who have signed the Courtauld Commitment (a voluntary agreement between companies and WRAP) agree to have supreme wastage step-down by 2010 (WRAP No Date). The Food and drinkable Federation (FDF) with its green agenda for food and drink manufactures also play a key role in helping companies reduce emissions and waste as well as cutting the make sense of packaging that inducees households (FDF No Date). The Department for Environment, Food and Rural Af uncloudeds (Defra) works with the government and consumers in an effort to reduce waste with recycling and composting of household waste (DEFRA No Date).This has relieve oneselfd more consumer awareness and this new found awareness puts pressure on food retailers to meet waste reduction puts (Appendix 4). Waitrose currently puts into practice the use of the ternion Rs (reduce, reuse and recycle) to separate waste away from landfills (Mintel 2008 resp ectable and unripened Retailing) Sustainable sourcing has become a very real issue with consumers over the past few years with a demand for supermarkets to ensure that their produce such as fish and meat are from sources that can be replenished.Another form of sustainable sourcing is for supermarkets to source their produce topical anaestheticly or else than importing from afield. This has a huge contact on carbon use as well as a remarkable touch on on creating sustainable economies in our local communities (Mintel 2009 Influence of the Environment on Food Shopping). MICRO ENVIRONMENT Suppliers bottom of the inning its 18,000 different products, Waitrose is supplied by 2500 firms in over 60 countries. The majority of them are picayune scale and regional producers. Waitroses main manoeuvre, to offer high quality product, is the base of its plan to source goods from the areas where it trades.For example, that will take the real taste of British food with its regional var iety. Furthermore people will have easy access to profane local food and second its local economy. Regardless of the puny or big producers, Waitrose aim to work with decency and respect in recollective term with its suppliers. It wants to help its suppliers to reach their objectives by ensuring them that it will keep the righteousness or quality of the suppliers product. For this reason, Waitrose wants its producers to use recognisable and with the dress hat quality ingredients for the food, not a list of chemicals such as stabilisers or preservatives. Waitrose. com. The Waitrose Small Producers Charter) To succeed in that approach, the corporation presented a new Waitrose topically Produced depart, which will aim to offer the best local quality food and great customer service to its customers. The difference between Waitrose and the other UK retailers is the co-ownership of political party by its staff, not the in the public eye(predicate) shareholders who only demand for lovesome and pull inable return of their investments. It allows it to make presbyopic term growing plans and continuing congenerships with its producers in order to face its great customers expectations. Waitrose. com. The Waitrose Small Producers Charter) In order to prove their musical accompaniment for fine local producers, Waitrose teamed up with The Times to create The Small Producers Awards in 2001. For example, its eldest year category winners will receive ? 7,000 in cash, plus access to Waitrose business and marketing expertise. (Waitrose. com. The Waitrose Small Producers Charter) Moreover, in relation to the UK fadeout, followed by the consumer downturn, Waitrose asked 1000 suppliers to cut their prices with 2%.The request was addressed mainly to suppliers of brand food and provokeers in UK. The managing director Mark Price explained companys decision with the fall in commodity prices, which makes suppliers peeled material cheaper. Furthermore he states that the Waitroses market growth will lead the suppliers to sustain profit, which they should share with their biggest buyer. Moreover illusion Lewis alliances decision was agonistic by the annual report of the company, which expose 26% fall in pre-tax profit for 2008 to ? 279. 6m. (Telegraph website, 12/03/09)Intermediaries By rewarded as the UKs favourite retailer for 2007 and 2009, Waitrose main aim is to sustain its patriotic and respectful race with its suppliers and participators. It is the main intermediary of its own mark goods. Furthermore, Waitrose nurture long-term relationships with its suppliers, paying the bewitching price and helping them to reinvest in their business. It is the close ceremonious local sourcing initiatives in its sector. in all Waitrose shops have a regional go, which covers in excess of 465 producers supplying over 1,400 product lines.In order to ensure its support for UK suppliers and in response to customer feedback, Waitrose has developed new shelf-edge ticketing, which emphasise the county, origin and unparalleled qualities of each product. (JLP annual report 2009) Moreover, Waitrose collaborate with other intermediary companies in order to transfer the produced goods from its supplier to the customers. Its main allocator is the online supermarket delivery company Ocado. It operates mainly in Greater capital of the United Kingdom, covering over 3 million households. Their relationships evolved in 2002 when tail Lewis fusion bought 29% of Ocados shares.In do-gooder, their proclamation will expire in 2013. apart(predicate) from Ocado, Waitrose has established an own online delivery in over 100 break ins. (JLP annual report 2009) Financial In difference from the other UK retailers, Waitrose isnt have by public shareholders and the City. In stead of cruel shareholders, whose fixed idea is to gain profitable quick returns, Waitrose is a part of rear end Lewis partnership, which is have by its workers. Each year, every partner share companys profits, which in others retailers go to the shareholders.This organisational system makes extraordinary consignment and loyalty amongst its labour. Furthermore company could encomium itself with partners who worked with it for many years. This system makes its workers to be raise in what they are doing and selling. For that reason the often good remarks of the customers about the customer service are not surprising, because every worker in the local store do in fact own the store. (Waitrose website. The Waitrose discrepancy) Moreover, an interest public fact is that Waitrose holds a violet Warrant with Her loftiness The pouf.This mode that company is chosen to supply the violet Family with goods for five years. Moreover, Waitrose held the long-lasting Warrant with Queen Elizabeth The Queen Mother. That is a significant tell apart for the great quality that Waitrose has been offering through the years. (Waitrose website. The Waitrose Differenc e) Government As an established responsible and reliable retail company, Waitrose aim to consider and follow government insurance. It is in a consistent relationship with any local government, discussing key issues which affect its partners, customers and communities in which it operates.Furthermore it is an active member of government insurance policy advisory groups, such as Climate Change Leaders Group, British Retail Con consortium and Retail Energy Forum. ( bath Lewis Partnership website, Engaging our stakeholders) Moreover, Waitrose cooperate with local authorities during planning and construction of all its new shops. It wants to ensure that its new stores are built responsibly and will operate sustainably in order to diminish its impact on the environment and the local community. ( privy Lewis Partnership website, Engaging our stakeholders)Lastly, Waitrose and its parent jakes Lewis Partnership work closely with regulators such as Environment Agency and Health & condom E xecutive to express that the Partnership do all its best in shape with the law. In any case of legal issue occur, it respond immediately, and cooperate with the local regulator to resolve the problem as quickly as possible. (John Lewis Partnership No Date, Engaging our stakeholders) The company Waitrose stems from a small grocery shop called Waite. Rose & Taylor founded by Wallace Waite, Arthur Rose and David Taylor the small grocery shop opened for business 1904.Four years on the founders decided to rebrand the company in 1908 by changing the company label to Waitrose, which is a combination of two of the founders surnames. The Waitrose Company desired changed once again so joined The John Lewis Partnership 1937, whereby clx Waitrose employees became partners or co-owners of the business (Waitrose No Date The Company). The John Lewis partnership is formed by 70,000 partners (staff) who co-own John Lewis department stores, Waitrose supermarkets, an online and catalogue business (John Lewis Direct-johnlewis. om), a direct service company (Greenbee), three production units and a farm. (The John Lewis Partnership No Date) (John Lewis Partnership CSR identify 2009, Page 5) The Waitrose difference Waitrose emphasises operation nearly offering the best quality goods and have adapted their daily producers, to make shopping easier to suit all by offering a distinctive service such as packing at checkouts, comport to car service and assists to those that required it it is this that they retrieve gives them the edge over other supermarkets (Waitrose No Date The Waitrose Difference)Waitrose has an portentous return policy whereby customers will receive their full money back, if they genuinely pursed t a product they didnt require or a customer is not one light speed percent happy with the product. It is this edge that provides Waitrose with long lasting loyal customers that trust the supermarket they shop in. As well as food products Waitrose offers Branch E xtras at selected stores enabling customers to rent wines glasses, beer glasses and fish kettles free of charge as a friendly jester(Waitrose No Date The Waitrose Difference).Waitrose commitment to provide large produces and serve has been credited with a Royal Warrant from Her Majesty the Queen Which is a mark of recognition of those that supply goods or services to members of the Royal Family for at least five years(Waitrose No Date The Waitrose Difference). Employees Waitrose employees are also co-owners and form part of the John Lewis Partnership the John Lewis Partnership aims to employ exceptional staffs that are dedicated to set the consumers needs first whilst delivering excellent customer service.The John Lewis Partnership aims to keep the rejoicing of its employees at the heart of the partnership and uses a blend of five key elements to do this Work/life balance employees are encouraged to keep a check balance of work and play to support this the partnership offers flexible hours, career breaks, long leave, a flexible retirement policy . Competitive pay and benefits the partnership aims to assign a pay policy which is competitive while being fair to all partners and offers a range of partners benefits from usher outs and bonus to life insurance. Filling capability the partnership gives all their employees the chance to reach their full possible and required all employees to ender go despotic training. There partnership also allows employees the opportunity for promotion and career development programs. passably treatment the partnership treats all its employees fair and provides equal opportunities for all, regardless of age, gender, ethnicity, social background, piety and disability or sexuality. Powered by our Principles (PboP) these are six principles sets out to inform employees of what is expected from all them be honest, give respect, recognise others, provide enterprise, work in concert and achieve more (Waitrose No Date Our Employees) Customers The John Lewis Partnership aims to deal supraboard with customers, securing their loyalty and trust by providing great(p) choice, value and service. (John Lewis Partnership CSR Report 2009, pg 4) Waitrose dominates a niche market were its target customers are believed to be birdfeeder with a more flexible spendable income.They are associated with the pump classes along with high class food and fantastic customer service. Their repeat custom is formed, as the consumer seeks a well established supermarket they can trust and complete their periodic shop in a supermarket thats driven by high quality unclouded food. (Mintel 2009 Food Retails Waitrose) A loyal Waitrose customer will complete their hebdomadary shop unconditionally every workweek in there local Waitrose store however if they need a product unexpectedly they will use a convenient store as a one off it is it nearer in location.Typical Waitrose customers are considered to be affluent with a m ore flexible disposable income, middle to high classes, working professionals and health focused consumers (Mintel 2009 Food Retails Waitrose). In addition another important factor that adds to the customer that shops at Waitrose supermarkets is the location of the stores as Waitrose stores are based more southwestward/ easternmost England and areas that are frequently referred to as classy, where people are financially prosperous (Mintel 2009 Food Retails Waitrose).Waitrose strive to maintain exceptional customer service and are always constantly evaluating their services to unsure they are fulfilling their consumer needs. Waitrose uses a range of formal methods of re blackench and feedback, such as customer surveys, panels, focus groups, online feedback forms and regular mystery shopping to ruck up sufficient evidence to monitor their customer service and performance necessary serve if required (John Lewis Partnership No Date Customer Service) CompetitionWaitrose occupies up to 4% of the UK grocery market, this compares with the largest food retailer in England today is which is Tescos who hold a massive 30 % share of the market. In the UK today every ? 1 in every ? 7 of consumer spending is fagged in one of Tescos stores. Tesco specializes principally in food and drink with its tax and Finest ranges that we all know well, but it has also become a major p floor in a range of non-food markets including consumer electrical, article of clothing, financial services, telecoms, fuel and internet services amongst others.In 2008, Tesco grounded a new Discount Brands range, which is pitch towards consumers seeking to trade down but not ready to compromise on quality. The new range outs to have halted the fellate of customers to Aldi and Lidl. Tescos sheer scale means it has been able to lower prices on the back of large volumes. Tescos has different types of stores every one of them targeting different consumers, tesco express for example, the smalles t one in the range, is designed to be a gubbins shop where the costumer can Top-up (Mintel 2009 Food Retail Tesco).Other major players are Asda, Sainsburys and Morrisons with Asda taking up to 17% of the market. Asda has a similar range of product to Tesco but opened up the clothing market in supermarkets but presenting its own brand known as George at Asda. Asda, part of Wal-Mart, directs its main focus on price, primarily targeting the lower end of the mass-market although the current climate is increasing demand for discount items from a variety of consumer groups. In damage of consolidated sales, in 2008 the company was the triad largest grocer in the UK although when fuel sales are removed Asda moves into second place posterior Tesco but above Sainsbury.What has really set Asda apart from its rivals in the food sector in the UK has been its lack of public toilet store activity. While Tesco and Sainsburys have attacked the c-store sector very aggressively, Asda has been hap py to maintain its larger big-box stores enabling them to maintain a carriage out of town. (Mintel 2009 Food Retail) Waitrose occupies a relatively small but nevertheless very powerful portion of the market with its at hand(predicate) supermarket being mark and Spencer. Both of these supermarkets aim at a quality rather than quantity market with prices generally being higher(prenominal) than the larger supermarketsMarks and Spencer holds somewhat 3. 9% of the grocery market. The main differences between of the two gyves is that Waitrose holds 18% of organic food ranges and sells none Waitrose brand products whilst Marks and Spencer sells just its own made brand. Marks & Spencer is the UKs leading non-food retailer, but food has long been a part of its heritage. The company trades from a premium positioning, emphasising quality and value. dry groceries are only a small part of the offer, with the company instead focalization on ready prepared meals, fresh items and foods fo r special occasions.The food range is usable from specialist Simply Food convenience stores as well as the larger general merchandise outlets. (Mintel 2009 Food Retail Marks & Spencer). In the food retail industry we find that there are two different orientated companies, price orientated and customer orientated. Waitrose aims at the customer orientated market and this has generally held them in good stead. The recent recession was a testing time for the company but their strong brand name appears to have weathered the storm and it has achievementfully carry its position.Media Waitrose takes its promotion and advertising seriously and has a very organised and wide range of media publicity. On they own website they have options to find press releases and press packs and it is optional to sign up to receive daily updates regarding Waitrose. They have affirmed their commitment by appointing special K Union as the lead digital agency for Waitrose. The agency will relaunch the bran ds website Waitrose. com, as well as produce digital marketing for Waitrose Deliver, the brands online grocery shopping service.Waitrose uses boob tube and advertising extensively to promote its products and services and has announced recently that celebrity chefs Delia smith and Heston Blumenthal will join forces in a collaboration that will see them appear in TV, press and online advertising for the grocer (Waitrose 2009) The company website now provides an option to find all the recipes that have been used on the show. In addition John Lewis, the stores sister brand, has launched a glossy customer magazine, which will be made available in all Waitrose stores, with an initial print run of 500,000.The launch is backed by an in-store marketing advertise (Mintel 2009 Food Retail).. usuals The company takes its public and social responsibilities very seriously and its basic school of thought is as follows- As a responsible retailer, owned beneficially by our employees, we believ e that the long-term future of the Partnership is best served by respecting the interests of all our stakeholders Partners, customers, suppliers and the wider community. We look actively for opportunities to improve the environment and to contribute to the social welfare of the communities in which we trade. (Waitrose Feb 2010 labour Centre) In 2008, Waitrose was the first UK food retailer to begin using Anaerobic Digestion (AD), a process which eliminates the need to send waste food to landfill sites. (Waitrose Feb 2010 Press Centre). Waitrose commits at least 1 per cent of pre-tax profits to charitable and community projects. They are also committed to providing support to foreign disasters through the British Red tag and are involved in over 100 projects involving 16,000 people in South Africa rolled out to Ghana and Kenya.Their target is to increase activities in the field referred to above and to actively encourage participation in Sport and physical exercise in the UK. T hey have already larked 50 per cent of their total operational waste food away from landfill and their goal is to divert 95 per cent by 2013. Waitrose is set to launch an environmental initiative inviting customers to show eco ideas that it can implement into the business. Your Green liking was launched on 15 expose 2010, quest a soft launch of the website.It is suck that Waitrose is very committed to its social and public responsibilities and have a proven click record to support their mandate SWOT ANALYSIS Internal Strengths Waitrose was one of the first retailers to develop own brands (after Marks and Spencer). Their own brand line carries over 18000 products including 117 lines in their Perfectly Balanced range which promotes a fresh and healthy lifestyle for their customers (Mintel 2009, Food Retail UK Waitrose). Waitrose differentiates itself strongly from other supermarkets. They have a more delineate range of products with focus on high quality food and up-market pr oducts.They are extremely customer orientated and place great emphasis on customer service as one of their unique selling points (Mintel 2009, Food Retail UK Waitrose). According to a survey by Which Waitrose is the leading supermarket chain in food quality and range. unaccompanied ASDA was rated better than Waitrose for value for money (Which 2008) Having owned their own farms for over 70 years Waitrose prides itself on working with its farmers, growers and suppliers directly to ensure that only the highest quality food from the most ethical and environmentally friendly sources reach they consumers.This is supported by its own inspections and farm assurance schemes (Waitrose No Date gunstock of our Food). Waitrose was the first ever winner of the title Organic Supermarket of the Year and have over 16 awards for wine purchasing and retail. These are just some of the many awards that have been claimed by Waitrose over the past several years (Waitrose Various Dates Press and Awa rds). Waitrose also holds a Royal Warrant with Her Majesty the Queen to supply goods to members of the Royal Family (Waitrose No Date The Waitrose Difference).Waitrose was the first to introduce self-scanning ( fast Check) in some stores, which demonstrates a willingness to innovate and offer a high service and reducing costs. Recent technological innovations that have been introduced in stores include printers which provide price labels and barcodes for any stock that needs to be reduced and hand held devices available to shoppers to use as a self scanning system. (Thompson. S 2010). The partnership with John Lewis gives Waitrose tested supplier links and economies of scale. Waitrose would struggle to achieve the success it has today without the help of the partnership.The partnership also functions as a conglomerate thusly diversifying risk. The association with John Lewis improves Waitroses composition (John Lewis Partnership No Date). Waitrose has a strong culture of co-owners hip due to the fact that its not owned by shareholders but owned by everyone who works for the partnership. Their staff are generally well propel because they are partners and profits ultimately come back to them. Various other benefits (such as pension schemes) are what make Waitrose a good employer, with satisfied employees. Waitrose No Date The Waitrose Difference) Internal Weaknesses The statistical distribution of the Waitrose stores is quite weak, especially in certain areas such as the south west of England, Wales, North-West of England, and Scotland. However their acquisition of 13 Somerfield stores has lead to an elaborateness of distribution into the North of England and Wales (Chesters. L holding Week 2009) Own labels are the main department within their product mix. Waitrose is very dependent on this product range with a majority of sales access from its own brand.Larger diversification would be helpful to gain better strength in the market (Mintel 2009 Brands Ar e Supermarkets squash Out Brands) Waitrose also has the weakness of only supplying high quality, high price products. This could be seen as a negative factor due to the exclusion of an immaculate demographic of people in the lower class of the population who could be potential customers. However they have recently made attempts to increase their target demographic through the introduction of an economy range brand as Waitrose Essentials.This shows they have recognised a potential for expansion and this can lead to further developments in the future (Finch, J demo 2009) External Opportunities Further expansions passim the UK would be useful to raise the richness of the firm, gain market share and, go bad the competitors purchasing their own branches and improving e-commerce. in any case further acquisition of competitor stores such as the Somerfield stores purchased by Waitrose would lead to increased market share (Chesters. L belongings Week 2009). Waitrose has an elaborate online shopping mental quickness in place however, this as well is subject to regional limitation.Expansion of distribution channels for online shopping facilities would help Waitrose get their products to customers who live outside areas where branches are located. put up new partnerships with other companies will grant higher incomes because both companies could be able to buy larger amount of products with cheaper prices. New Partnership could also help Waitrose to diversify into other non-food products other than those that John Lewis already offers. Waitrose has recognised this opportunity (All Business, No Date) External ThreatsA major part of Waitrose strategy on sales has been built on the sale of premium own brand products. Marks & Spencer, Tesco and Sainsburys have identified the sales of premium own brands as a lucrative segment with high margins and all three have a wide selection of premium products in store. Tesco and Sainsburys advertise on price which gives the pe rception of their products still being of a lower quality than those sold at Waitrose (Mintel 2008 Premium Foods UK) The recession while perceived to be coming to an end still has the potential to generate many problems for Waitrose.When interest rate rise this year people will have less disposable income and may start to buy cheaper products and so shifting from Waitrose to other cheaper retailers. This could result in a loss in consumers loyalty and this would give direct advantages to competitors (Mintel 2009 Food Retail) Also due to the weakened sterling there is a possibility that overseas groups could enter the market and increase competition generating the reduction of incomes and market share for each player (Keynote 2010 Food Industry) CONCLUSIONThe supermarket industry has gone through some important changes over the past few years. From our analysis of the macro environment we can see some main issues have impact the food retails sector. Environmental issues are now at the forefront of everything companies do, with consumers not only demanding more for their money but more for the environment as well. engineering has seen the internet open up a whole new way of shopping and while its still the early stages there is great promise for the internet as a medium for food purchases. alliance is changing in a way that will affect how people shop in years to come.Now with more people from different cultural backgrounds residing in the UK than ever before supermarkets must act fast to meet the new needs of a changing society. New legislation has stopped many key players in their tracks with plans for expansion as a new financial ombudsman now has the last raillery on whether a supermarket can work out in a certain location. The recession has had a major impact of the supermarket sector over the past couple of years. It has been the driving influences to a lot of changes which have been occurring in most of the major food retailers. While the superma rket industry is relatively ecession proof their customers are not and this has seen consumer trends of trading down and buying less. An analysis of the internal structure of Waitrose shows us a very strong company with high moral grounding and a passion for customer service. They may not have such large market share as the big quatern but they are growing at a rapid pace and with the addition of their new Essentials range to their portfolio they are preparing to enter a whole new main stream market. They pride themselves on having great relationships with employees and suppliers and are at the forefront of environmental issue such as sustainable ethical sourcing.Waitrose is a company that is read/write head in the right direction and while they are not without their weaknesss, distribution being a key factor, they are adept at recognising where improvements can be made and building towards a higher market share. 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