Government decisions affect supply side of retailing like general issues like taxation on business rates and VAT rates which affect retailing like other businesses. Decisions on road pricing affects the costs of movement of goods, fuel tax etc. Economic forces The economic structure will affect the retail landscape through construction of landscapes for consumption. The recent economic situation has made the life of these retail stores quite difficult. But the only safe assumption is that the broad economic structure of Britain will remain in place, this would open scope for further growth in retail sales.
There are many developers who are willing to invest in the commercial property of UK. Tesco officially announced that the company is looking to invest 2 billion pounds in China and thus is expected to have larger profit margins (Jones, 2013, p. 1). Following the 2008 financial crisis the UK economy was under recession and there has been a sharp fall in GDP and the disposable income of household. In 2009 the growth of disposable income in UK was even lower. Social Factor The retail grocery industry is shaped by social changes.
These include personal value, attitudes, lifestyles, demographics changes and household structure etc. Changes in the above factors will create opportunities and threats for the retailers. The demographic changes have profound impacts on the retail stores since individuals of different consumer behaviours will have different preferences and purchasing power (Ansoff, 2007, p. 152). With change in age structure the preferences of goods changes. Further the type of services and products which are demanded by consumers also change according to personal, attitudes and lifestyle value. With growth in living standard, individuals are pursuing high quality lifestyle.
Technological factors It is one of the main macro environmental variables which affect the UK grocery industry in terms of supply chain and operations. With rise in internet development there has been dramatic increase in subscription to the Internet. According to office of national statistics 73 % of adults in Great Britain have access to Internet every day. There have been a rapid change in the way of retailing and mainly leading retail supermarkets have successfully set up their online retail store (King, 2008, p.
1). Legal factors The UK legislation system has put in place a number of rules and regulations to monitor the grocery retail industry. The government has put in place many legislations of licensing of alcohol, tobacco, employment and consumer legislation and the registration of food premises.
Angwin, D. 2008. Business Strategy Pathfinder: Core Concepts and Micro-cases. New Jersey: John Wiley & Sons.
Ansoff, H.I. 2007. Strategic Management. New York: Palgrave Macmillan.
BBC. 2013. Tesco in talks with China Resources Enterprise. Available at: http://www.bbc.com/news/business-23628045. [Accessed on: 21 April. 2014].
Butler, S. 2013. Every little hurts: Tescos battle to regain markets and reputation. Available at: http://www.theguardian.com/business/2013/sep/29/tesco-recovery-strategy-markets-reputation. [Accessed on: 21 April. 2014].
Cox, R. 2006. Retailing: An Introduction, 5/E. New Delhi: Pearson Education India
Dransfield, R. 2013. Business Economics. New York: Routledge.
Ireland, R.D., Hoskisson, R. and Hitt, M. 2008. Understanding Business Strategy: Concepts and Cases. Available at: http://books.google.co.in/books?id=jX7RXTi8MTEC&dq=tesco+business+strategy&source=gbs_navlinks_s. [Accessed on: 21 April. 2014].
Jones, K. 2013. Tesco must learn the difference between value and price. Available at: http://www.marketingmagazine.co.uk/article/1214518/tesco-learn-difference-value-price. [Accessed on: 21 April. 2014].
King, L. 2008. Technology helps Tesco beat crunch. Available at: http://www.computerworlduk.com/news/outsourcing/11265/technology-helps-tesco-beat-crunch/. [Accessed on: 21 April. 2014].
Kourdi, J. 2010. Business Strategy: A Guide to Effective Decision-making. New York: Profile Books.
Martin, B. 2013. Horse meat discovery knocks £300m off Tesco market value. Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9805479/Horse-meat-discovery-knocks-300m-off-Tesco-market-value.html. [Accessed on: 21 April. 2014].
Neville, S. 2014. Tesco reveals £127m online profit as boss Clarke unveils new strategy. Available at: http://www.standard.co.uk/business/business-news/tesco-reveals-127m-online-profit-as-boss-clarke-unveils-new-strategy-9153651.html. [Accessed on: 21 April. 2014].
Rogers, T. 2012. Comment: Tesco needs to use technology to engage customers. Available at: http://www.retail-week.com/sectors/food/comment-tesco-needs-to-use-technology-to-engage-customers/5043554.article. [Accessed on: 21 April. 2014].
Ruddick, G. 2014. Philip Clarke interview: Tescos strategy is right. Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10659243/Philip-Clarke-interview-Tescos-strategy-is-right.html. [Accessed on: 21 April. 2014].
Ryan, D. and Jones, C. 2012. Understanding Digital Marketing: Marketing Strategies for Engaging the Digital Generation. London: Kogan Page Publishers.
Sadler, P. 2003. Strategic Management. London: Kogan Page Publishers.
Saloner, G., Shepard, A. and Podolny, J. 2008. Strategic Management. New Jersey: John Wiley & Sons.
Smithers, R. 2007. Forget Tesco: the bigger threat to small shops may be Waitrose. Available at: http://www.theguardian.com/uk/2007/jul/03/shopping.business. [Accessed on: 21 April. 2014].
The Week. 2013. Tesco under pressure from rivals as market share falls. Available at: http://www.theweek.co.uk/business/55306/tesco-under-pressure-rivals-market-share-falls. [Accessed on: 21 April. 2014].
Wood, Z. 2011. Tescos price war threat sends supermarket shares plunging. Available at: http://www.theguardian.com/business/2011/sep/21/tesco-price-war-threatens-supermarkets. [Accessed on: 21 April. 2014].