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 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, 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, 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.