Wal-Mart Sector analysis
Most of the big supermarkets now offer these services and the UK’s supermarkets are gradually following the ‘American way’ by following the most succesful supermarket in the world, WAL -MART. The traditional supermarket occupies a large floor space on a single level and is usually situated near a residential area in order to be convenient to customers. They also offer the convenience of easy parking and the extended shopping hours. In most cases they will choose to close between 6pm and 8pm but some now even stay open 24 hours.
Supermarkets main aim is to provide consumers with protucts that are good value for money. They do this by purchasing the goods in bulk and purposely set their prices with lower profit margins. In some cases they offer the product at such a low price that they aren’t making any profit at all. Some even making a loss! Examples of these products are bread, milk and sugar. To maintain a profit though, they rely on high overall sales of the products that they are selling with higher profits.
This seems to be currently working as company profits are on the increase. In order for the profits to increase still further, new cost cutting
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Within the food retail business sector there will be many big ‘players’, most noteably, like I mentioned earlier, WAL-MART. This is the biggest and most successful supermarket in the world. Supermarket Structure Wal-Mart was founded by Sam Walton in 1962 and became listed on the New York stock exchange in 1972. This business has grown and grown and not only is it the number one supermarket, it is also the worlds second largest corporation, behind Exxon Mobil. This is based on Wal-Mart’s 2006 revenue.
Wal-Mart reported a net income of 5.7 billion on ï¿½160 billion worth of sales. This gave them a 3.5% profit margin. Their revenue was up ï¿½13.5 billion than the previous year which is an incredible increase. It is thought that 20% of the food retail business sales are theirs in the USA. They are also an international business having stores in Mexico, UK, and Japan. These all have different names but are owned Wal-Mart. Wal-Mart also sold its retail operations to South Korea, Germany, Argentina, Brazil and Canada. These all give Wal-Mart 20.1% of its total revenue. Describe the size and structure of the food retailing sector
Tesco is the UK’s leading supermarket but is also a very successful international supermarket chain. Its market value is about ï¿½29 billion and is the fourth largest retailer in the world. According to TNS superpanal Tesco’s share of the UK’s grocery market in the 12 weeks up to the 18th June 2006 was 31.4%. Tesco’s overseas stores currently accounts for 23% of its total revenue. Tesco’s success is largely down to its ability to diversify into other areas. http://news.bbc.co.uk/2/low/business/4694974.stm
The 2nd ranked UK supermarket is ASDA, the 3rd is Sainsbury’s and the 4th is Morrisons At this moment in time, with the current state of food retail, the public are purchasing most of their goods from large supermarkets, but this was not always the case. Many years ago people would have to walk through the shop front door and ask the shop assistant to retrieve their goods for them. The goods were basic and the stock was minimal. This type of shopping has slowly changed to what we have today and generally seems to change over family generations