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Understanding Retailing and Buying: The External Environment's Impact on the Grocery Sector

This overview explores the external factors influencing retailing and buying in the grocery market. It examines PEST elements—political, economic, social, and technological—and their implications for competition and consumer behavior. Key issues include changing lifestyles, shopping habits, and the significance of convenience formats. Understanding customer expenditure patterns, demographic shifts, and health awareness is crucial for retailers. The insights drawn from reports like Mintel 2000 will aid in evaluating the evolving grocery landscape and adapting strategies for success.

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Understanding Retailing and Buying: The External Environment's Impact on the Grocery Sector

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Presentation Transcript

  1. RETAILING & BUYING‘The External Environment’

  2. Overview of Approach • Introduction • PEST factors in the industry • Competition • Key issues • Student Activity

  3. Introduction • The micro environment: the internal environment • Consumers, distributors, interest groups, competitors, suppliers

  4. The Macro Environment • Four key components: political/legal, economic, social/cultural, and technological.

  5. CUSTOMER EXPENDITURE • Mintel 2000 • Spending on food has decreased • Leisure-’on the go’

  6. Population and Household Structure • We are all gettng older • Less large families • More single households • Fragmentation • Convenience market

  7. Employment Structure • More people in work- Mintel 2000 • More women in work • Convenience market • Increasing hetrogeny in food shopping

  8. Changing Lifestyles and Eating Habits • Less formal eating occasions • More snacking • DAPYS- ‘Geest-Mintel 2000’ • More foreign foods • More variety

  9. 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!

  10. Microwave and Freezer ownership • 70% of households have a microwave- Mintel 2000 • Microwave meals • Stand alone freezers • Buying in bulk- BOGOFF

  11. Car ownership • 12.6% increase from 1995-2000 • Out-of-town superstores • Mobility is not an issue?

  12. Competition • Increasing competition, new merchandise lines • Non-food activities • “value retailing”- Cullen et al, BFJ, 103, 2001 • “Switching”

  13. 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

  14. 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.

  15. Thanks For Listening • Any Questions?

  16. 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.

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