Supermarkets in the UK Industry Market Research Report Now Updated by IBISWorld
London, United Kingdom (PRWEB) July 26, 2013 -- Supermarkets' performance is dependent on consumers' incomes and their willingness to spend. Most products sold by supermarkets are considered non-discretionary – the kind of spending that consumers are unlikely to abandon unless faced with severe poverty. According to IBISWorld industry analyst Christopher Edwards, “combined with the ability of large supermarkets to buy cheaply and sell at low margins, this means supermarkets can actually benefit from poor economic conditions like those that have been prevalent over the past five years”.
Over the five years through 2013-14, industry operators have taken revenue from independent convenience stores, department stores and specialised food retailers as consumers sought to minimise their household spending. Despite six quarters of economic contraction, the Supermarkets industry managed to continue growing throughout the period. The expansion was modest when compared with historical results, but a 0.8% revenue increase in 2009-10 and its estimated 1.9% compound annual growth over the five years through 2013-14 demonstrate the industry's stability. Edwards adds, “struggling consumers naturally gravitate to the lower prices offered by supermarkets, but they also spend less, which explains the lacklustre performance of the past five years in comparison with historical figures”. Industry revenue is anticipated to grow by 1.4% to £157.0 billion in 2013-14.
The industry has already moved to capitalise on the shift of consumers to cheaper goods. The introduction of own-brand products has allowed supermarkets to retain higher margins on goods they sell at low prices. The move of US warehouse group Costco into the UK market will give added momentum to the own-brand movement. The economy is expected to gradually recover from the recession and supermarkets' revenue is likely to develop as well. Most industry activity will be focused on limiting costs by consolidating, selling online, rolling out more self-service checkouts and attempting to exercise more control over their supply chains. As a result, supermarkets' revenue is estimated to accelerate over the five years through 2018-19.
A few major supermarkets dominate the industry; Tesco, Sainsbury's, Asda and Morrisons account for 71.7% of industry revenue. Of these, Tesco is by far the market leader, claiming a 28.3% market share. The 15 largest firms control approximately 95% of industry revenue. A key driver of the industry's growing concentration has been the incorporation of fuel sales into the business model. Large supermarkets have the capacity to combine discounted fuel with grocery purchases to attract customers. Increasing market share creates greater economies of scale, greater control of the supply chain and greater capacity to discount goods for longer. Without assistance from government regulators, smaller supermarkets are set to face a challenging five years.
For more information on the Supermarkets industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Supermarkets sell a range of groceries and foods, including fruit, vegetables, bread, cigarettes, canned goods, toiletries, dairy goods, alcohol and cleaning products. Alcohol retailers, specialised food and fresh food retailers, takeaways and convenience stores are not covered by this industry.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalisation & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 7222 9898.
Gavin Smith, IBISWorld, 310 866 5042, [email protected]
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