RETAILING & BUYING‘The External Environment’

Overview of Approach

• Introduction

• PEST factors in the industry

• Competition

• Key issues

• Student Activity

Introduction

• The micro environment: the internal environment

• Consumers, distributors, interest groups, competitors, suppliers

The Macro Environment

• Four key components: political/legal, economic, social/cultural, and technological.

CUSTOMER EXPENDITURE

• Mintel 2000

• Spending on food has decreased

• Leisure-’on the go’

Population and Household Structure

• We are all gettng older

• Less large families• More single

households• Fragmentation• Convenience market

Employment Structure

• More people in work- Mintel 2000

• More women in work

• Convenience market

• Increasing hetrogeny in food shopping

Changing Lifestyles and Eating Habits

• Less formal eating occasions

• More snacking

• DAPYS- ‘Geest-Mintel 2000’

• More foreign foods

• More variety

Health and Food safety concerns

• Growing awareness in last decade- COMA reports

• Healthy, low-calorie, reduced fat foods.

• E.g. Weightwatchers, Be-Good-To Yourself

• Functional Foods

Claudio!

Microwave and Freezer ownership

• 70% of households have a microwave- Mintel 2000

• Microwave meals

• Stand alone freezers

• Buying in bulk- BOGOFF

Car ownership

• 12.6% increase from 1995-2000

• Out-of-town superstores

• Mobility is not an issue?

Competition

• Increasing competition, new merchandise lines

• Non-food activities

• “value retailing”- Cullen et al, BFJ, 103, 2001

• “Switching”

Key Issues

• Convenience shopping

• “New convenience-style retail formats emerge as a means of accomodating products and services that save time and reduce household work” Cullen, BFJ, 103, 2001.

• New retail formats- Tesco article

Student Activity

• Look at this quote again:

“New convenience-style retail formats emerge as a means of accomodating products and services that save time and reduce household work” Cullen, BFJ, 103, 2001.

Can you give any examples.

Thanks For Listening

• Any Questions?

References

• Cullen. P and Newman. J. A, 2001, ‘From retail theatre to retail food show, The shrinking face of grocery’, BFJ, 103, 7, MCB press.

• Clarke. I, 2000, ‘Retail power, competition and local consumer choice in the UK grocery sector’, EJM, 34, 8, MCB press.

• Mintel report 2000, Environmental factors affecting the UK grocery market.