Investigation of UK Supermarkets

Investigation of UK Supermarkets Introduction A supermarket is a large self service retail outlet that deals with the sale of groceries. However, this definition is just a general overview. This is for the reason that modern supermarkets include a huge ultramodern building that provides packaging services to their shoppers. Currently, supermarkets are not only restricted to selling groceries. Many large supermarkets also sell other products, such as, electronics, clothing, and furniture. A more advanced version of supermarkets is the hypermarkets.Advertising We will write a custom report sample on Investigation of UK Supermarkets specifically for you for only $16.05 $11/page Learn More There are so many supermarkets in the United Kingdom today. Their emergence and rapid growth was experienced during the period between the First World War and the Second World War. There are many factors that influenced their growth in the United Kingdom’s supermarkets. These factors include the favour able legislature and a preference of consumers that acted in favour of their growth. The legislatures have passed through a series of adjustments to respond to the consumer needs. One of the main aims of these regulations was to support the growth of larger self-service retail outlets while at the same time ensuring that the small retail counter-service stores retain their role in the newly structured retail market. However, these legislatures have not been quite effective in some of their policies for the reason that despite their enforcement, the growth of large self-service retail stores has continued to strangle the smaller retail outlets from the retail market. T hus, Britain’s high streets have continued to be dominated with large faceless retail stores making the small retail stores to diminish in the market. It is quiet correct to say that the UK supermarkets have continued to dominate the grocery market and are very powerful in the way that they run their businesses, and the number of local convenience stores has also continued to decline. The Retail Landscape Of 1955 The modern debates about the retail outlets are mainly influenced by the past retail landscape. The recent research done by the ‘Clone Town Britain Survey’ has been able to reveal that during the 1950s, the retail spaces were filled with a prosperous complex of independent small retail outlets such as butchers, food chains, greengrocers, stationery shops, and news paper agents. Currently, these spaces have been taken up by large supermarket retailers that are rapidly killing the small shops (Maxwell Slater 2004). In the late twentieth century there has been a rigorous retail change in British cities. This change includes the transformation from British high streets that had independent shops together with those shops owned by multiple co-operative retail organizations into the contemporary British high streets that have ultra modern superstores. It was during the lat e twentieth century that the counter-service groceries began to seriously compete with the modern self service retail outlets currently known as supermarkets.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More According to the available records, supermarkets were heralded by multiple chains owned by co-operative retail organizations. The economic implications of the co-operative retailing modelling were that it led to the growth of the business thereby causing its expansion in the retail landscape. In the period between the first and the second world wars, the companies that had multiple grocery shops experienced a booming business due to the increased purchasing power of the employed citizens. The increased presence of cheap food also contributed to the booming business experienced by the multiple chains during this period. One thing worth noting is that the small shops owned by in dependent retailers in the mid twentieth century were not necessarily synonymous with the size as described. This is because some of the retailers had large shops that would, sometimes, be the most significant store in a particular locality. The idea of the supermarkets experienced its rapid assimilation in the United States of America during the early twentieth century. However, when it was introduced in Britain, it came less rapidly with the first supermarket being operated by the co-operative movement as a self service food experiment. This was during the period when the Second World War was just ending (that was during the mid 1940s). Very few grocers emulated the trend thereby contributing to the slow process of the growth of self service outlets. It is therefore estimated that in the year 1947, there were a mere 10 supermarkets in the whole of the United Kingdom. There are many reasons why the growth of self service stores was slow in Britain. Notable among them was the amount of resources needed to convert counter-service outlets into self-service retail outlets. A lot of building materials and human resource in the construction industry was required. It should be noted that both of these requirements were short in supply. For that reason, very few companies were able to afford to convert their stores. The second reason was because the shops were limited by their sizes. Some of the shops were so small thereby could not be converted into larger supermarkets. The only option the retail owners were left with was to begin building from the scratch. Otherwise, their conversion would only result into small scale self-service stores, not big enough to be called supermarkets. There were some large-scale multiple stores that had embraced this change but due to doubts, they did not expect successful results. Many studies had been done and the most notable conclusion of the analysis was that since the majority of Britons had been accustomed to small scale counter- service, it would not be feasible to imagine them wondering along the aisles of the self service stores in search for goods.Advertising We will write a custom report sample on Investigation of UK Supermarkets specifically for you for only $16.05 $11/page Learn More It was until the mid twentieth century that the self-service stores gained momentum in growth. The main effects of this rapid growth were positively imparting. Many supermarkets developed as a result of these factors coupled with the government’s promotion of self-service retail stores. In addition, some elements of the retail grocery counter-service stores were also keen in developing self-service stores. As a result, Britain managed to open a total of fifty supermarkets by the year 1950. The trends continued and by the year 1961 the number of supermarkets had risen to 572. Reports indicate that in the year 1969, there were already 3,400 supermarkets in the whole of Britain. Legal Framewo rk and Economic Structures That Have Enabled the Domination of Supermarkets in the United Kingdom The legal framework in the United Kingdom is one that allows free market capitalism. Thus, the U.K. supermarkets are free to follow the principles of supply and demand. This means that they do provide the goods that the customers want while at the same time free to set the prices of the same goods. This liberty is provided for by the UK’s legal framework and hence it is legitimate for them to lay down prices as per their requirements. Hence, they also have bargaining power whereby they can pay their suppliers according to what they want. The level playing field brought about by the legal framework of the United Kingdom also ensures that there is healthy competition. However, the discrepancies caused by this legal framework have not been supportive enough to the small businesses. Small retailers have therefore been squeezed by the larger self-service businesses thereby causing the m to have less for them to buy since they have weaker purchasing power. This mechanism works in such a way that the supermarkets enter into a contract with major suppliers in which their agreements bind the suppliers not to supply anyone else with the goods. The effect of this legal framework also affects the small shops in such a way that the preference of most consumers in buying many goods under one roof reduces the viability of the small shops. The Role of Large Growing Supermarkets to Consumers Policy makers have been involved in enacting legislation that aim at tightening regulations of supermarket retailing. This has been capacitated through competition legislation coupled with town planning. The rapid growth of large supermarkets has been viewed in a different perception by the communities. There has been a lot of debate on the effects of the rapid growth of large supermarkets. Many people have perceived this growth as a factor that has led to the decay of major business str eets in the cities. Many investigations have been launched to look into the issue of building large out-of-town supermarkets and their contribution to the decay of high streets. A good example of such investigations is the 2005 study done by the ‘Clone Town Britain Survey’ (Hamlett et al Not Dated).Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The report of this study criticized contemporary British retail industry on many issues. The bone of contention is that the modern UK retail outlets have dominated Britain’s high streets in many towns. The effect of the domination is that the faceless chains have led to the reduction in the amount of choices available to consumers. The effects of reduction in small retail shops and the increase in large supermarkets were also analyzed by ‘The High Street Britain 2015† report. The report that was done by the House of Commons Select Committee argued that the extinction of the small shops by the growth of large supermarket chains will adversely affect consumer choice. This will happen if the government doesn’t take necessary measures to avert the process. The act of enacting necessary legislature to regulate and bring a state of equilibrium between growing supermarket chains and diminishing small retail outlets is therefore left in the hands of policy makers. This situation holds because the retail business in Britain has passed through tremendous changes from counter service-shops to large retail outlets that allow for self service. It is worth noting that consumers in Britain have been rapidly embracing self service methods of shopping over the past 20 years. The issue of consumer choice also form the central pivot on which the contemporary debates hinge. Consumer choice is perceived as a moving force to a healthy competition and also it indicates the basic civil rights. It is thus perceived that the diminishing of the small retail outlets will have a catastrophic impact on the aspect of consumer choice in the future. A careful analysis indicates that the party that will be affected negatively is the consumer. To exemplify this, there will be limited brands to chose from, limited choice of available items, limited choice of places to shop, increased prices of available products and a reduction in the quality and availability of custome r care services. According to ‘The High Street Britain 2015’ survey, the consumers are unlikely to benefit from a competitive market in the future. This is because the current competition is not stable and therefore may not be sustained in the long run. Similar researches have also highlighted the importance of consumption in relation to social aspects (Hamlett et al Not Dated). It is thus imperative for policy makers to consider exploring the benefit of the history of self-service retail stores to post war Britain. Benefits of Modern Technological Input in Supermarkets to Consumers Modern technologies have been employed in supermarkets to improve efficiency and quality of services. One of the most notable is a loyalty card. This is a card made of plastic or paper issued by particular organizations, be it business or social organizations or otherwise, to identify the holder as having a legitimacy of membership to a loyalty program. It is usually similar to a debit card or a credit card although this is only on the physical visualization. Its name varies from country to country. Loyalty cards are employed by consumers as a show of their identification (as loyal clients) in a given supermarket; this will assure the shopper of a discount on the existing purchase or an incentive of points that can be used to pay for goods in the future after accumulating to specified levels. The other benefit of loyalty cards is that it assures the customers that they will get great services of high quality. This is because the business organization knows that the loyal customers holding the loyalty cards will give them good business. Customers receive discounts from the products they purchase and can also purchase the goods by redeeming the points (Dahlen, Lange Smith 2010). Protection of Consumers by the Law The competitive free market allows for the consumer to respond to a disappointing purchase by switching to another supplier. In such an environment, the law do es not have a role to play. Currently, most contracts protect the consumer expectation arising through bargaining process (Howells and Weatherill 2005). The law gives a provision that acts to ensure that consumer preference is securely enforced. In the United Kingdom, the law that seeks to protect consumers usually operates beyond the realm of obligations agreed between the producer and consumer. The individual consumer’s legal rights offer a more first hand protection of their demands than the more indirect and greatly oblique sanction of commercial failure caused by withdrawal of custom. Failure to conform to the contract between the consumer and the retailer will result in legal liability. This protects the consumer and sharpens the message to the producer about the need to use resources in an efficient manner. In addition, there is also the private law that gives the consumer autonomy to act in the belief that they hold rights protected by law that can be asserted without the need to rely on an intermediary. The current market practice relies on the assumption that private economic relations involve the possibility of receiving some kind of support from the government. The support is believed to come in form of provision for enforcement of private law rights. It should be noted that the consumer/supplier relationship under the current private law assimilates more than a simple agreement. Both the courts and the parliament have extended the legal implications of the consumer/supplier relationships, and over the last twenty years this trend has been promoted and underpinned by legislative activity in the country (Howells and Weatherill 2005). Ways of Improving Competition between Supermarkets There are a number of ways that can be used to improve competition in the supermarket grocery stores. Many methods relate to the mechanics of inflow and outflow of products sold in these grocery stores. Among the methods includes the maintenance of optimal produc t availability. Recent studies have indicated that 8.2 percent of a grocery retailer’s items are out of stock on a typical afternoon. Frequent stock outs and restricted variety of products are among the major factors that cause consumer dissatisfaction among supermarket shoppers (Matsa 2009). Therefore, supermarkets should enhance product availability so that healthy competition is ensured. This will also enhance the consumer’s future shopping behaviour. The structure of retail competition is correlated with the quality of supermarkets. Stores that face healthy competition usually have higher rates of stock outs than other stores. It is worth noting that an increase in prices of commodity increases the quality and availability of products on supermarket shelves. This is because the increased prices act as an incentive to improve on the quality and quantity as well. Other methods of competition include developing new products, improving existing products, changing their prices, developing new packaging and design, improving customer service and building up a new reputation (Seliet 2000). Supermarkets ought to be responsive to personal needs, customer attitudes, tastes and preferences, economic conditions, the climate, supplier attitudes, the prevailing legislature, fashion and technology. These factors will aid in the development of new products thus bringing into the market an unrestricted variety of products. Thus, a healthy competition will be enhanced. Customer services should also be improved such that retail outlets ensure that the customer is satisfied with their products. Changing the prices of commodities can make a retail outlet win a massive share of the market by attracting more customers which results in making of more profits thereby competing with rival businesses (Seliet 2000). Conclusion In conclusion, supermarkets in the United Kingdom rapidly developed during the period between the two wars. This is because the idea of large sel f-service retail stores developed less rapidly in the United Kingdom than in the United States. It was only until the 1950s that the smaller counter service stores found themselves competing with the larger self service stores. The government of Britain recognized the importance of supermarkets in economic development and thus, began to enact legislature in support of their growth. Although these laws have been moderated in favour of the consumers, the self-service retail outlets and the small scale retail services, the small scale retail outlets have continued to diminish from the British markets especially along Britain’s high streets. Reference List Dahlen, M., Lange, F., Smith, T., 2010. Marketing Communications: A Brand Narrative Approach. West Sussex, John Wiley Sons Ltd. Hamlett, J. et al., Not Dated. Regulating UK Supermarkets: An Oral-History Perspective. [Online] Available at:  historyandpolicy.org/policy-papers/papers/regulating-uk-supermarkets-an-oral-history- perspective . Howells, G., Weatherill, S., 2005. Consumer Protection Law. Ed. 2. Burlington, USA, Ashgate Publishing Company. Matsa, D., 2009. Competition and Product Quality in the Supermarket Industry. Northwestern University, Kellogg School of Management. Maxwell, S., Slater, R., 2004. Food Policy: Old and New. Oxford United Kingdom, Blackwell Publishing. Seliet, H., 2000. Foundation Business. Oxford, Heinemann Education Publishers.