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RETAIL Flashcards

1
Q

What was the increase in total market share for food retailers between 1987 & 1998?

A
  • £45.5bn -> £93.3bn
  • Tesco overtake Sainsburys
  • No. 1 market share (£8.4bn -> £15.4bn)
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2
Q

In order, who were the food retailing leaders up to 1990s?

A

1) SAINSBURY
2) TESCO
3) SOMERFIELD
4) SAFEWAY
5) ASDA
6) KWIK-SAVE

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3
Q

What was the growth strategy of Sainsburys? (up to 1990s)

A
  • Organic growth
  • Est. late 19 century in London
  • By 1928 - 281 branches (mainly London)
  • 1950: introduce first self service store
  • 1970s: major expansion strategy to start selling own brand products & set retail price for companies (e.g. Unilever)
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4
Q

What issue did Sainsbury suffer from in terms of expansion?

A

Upmarket, Southern company -> reluctant to expand North

Even today, largest market share in SE

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5
Q

What was the growth strategy of Tesco? (up to 1990s)

A
  • Initially organic growth
  • Est. 1919 by Jack Cohen in East London
  • Small & cheap, focusing on packaged goods
  • 1957-64: Buyouts of stores in NE London; NW; Midlands

1980s

  • turned lots of small shops into larger, fewer stores
  • high street stores shut: first out of town retailer
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6
Q

What was the expansion strategy of ASDA? (up to 1990s)

A

First to take Yorkshire

1960s:
- GEM (American) opened 2 huge stores in Leeds & Nottingham but failed so ASDA buys them

Economies of scale; large, cheap stores
Attack on South - increase in store share from 101 (‘85) to 204 (‘91)

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7
Q

What is the wheel of retailing?

A

How many times retailing strategies occur

Think e-Commerce & home delivery is new by in 1930s, Co-op delivery to the door

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8
Q

What is Neil Wrigley’s idea of the ‘spatial switching of capital’?

A

Series of geographical changes in the operation of retailing activities, occurring at different spatial scales

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9
Q

What were planning regs like in 60s/70s?

A

Labour government

Protect city centres: against out of town centres

Highly regulated & controlled

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10
Q

What is central place theory?

A

1933
Showed spatial hierarchy
Idea that people gather in cities to share goods & services -> purely economic value

1) City centre
2) Regional centres
3) District centres
4) Neighbourhood centres
5) Local centres

OOT centres don’t fit the model -> not granted planning permission

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11
Q

What is the gravity model/spatial interaction model?

A

Quantitative Revolution - still used today

Used to assess where people would shop from various locations

Permission denied if there’s shown to be negative impacts on surrounding areas

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12
Q

What happened during 70s/80s that changed planning policies?

A

Arrival of Thatcher -> Laissez-faire/free market

Banned planning models

Enterprise zones

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13
Q

What are enterprise zones?

A

Very cheap land given to business owners -> job creation

Aided development of OOT centres

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14
Q

What are the negative economic impacts of OOT retail centres?

A

Structural unemployment (women employed in retail & miners without jobs unable to be employed)

City centre decline

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15
Q

What are the positive economic impacts of OOT retail centres?

A

Job creation

Tourism

Increased economic input in area

Increased consumer choice; decrease in prices

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16
Q

What are the negative social impacts of OOT retail centres?

A

Geographical social exclusion

Privatisation -> exclude particular people entering

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17
Q

What are the positive social impacts of OOT retail centres?

A

Leisure creation

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18
Q

What are the negative environmental impacts of OOT centres?

A

Increased congestion

Carbon footprint

Decreased aesthetics

Greenfield (decrease)/Brownfield (increase) sites

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19
Q

What are the positive environmental impacts of OOT centres?

A

Decreased congestion in town centres?

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20
Q

What are the 3 cases studies for OOT centre impacts?

A

Meadow Hall
- Taken Sheffield 20 years to recover

Trafford Centre

  • Project Sunrise but other areas suffered
  • Stockport lost 20% business

Bluewater park
- Developers hid negative impacts on surrounding areas

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21
Q

What were the 4 main problems affecting food retailers in 1990s?

A

PPG6 -> stopped development

Market saturation

Arrival of discounters (Aldi & Lidl)

Finance problems -> assets overpriced in 1990s house crash -> loss in investment

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22
Q

What was the ‘Golden Era’?

A

1979-1996: continued retail growth

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23
Q

Why did Kwiksave & Somerfield shut down?

A

1990s: Arrival of Aldi, Lidl & Netto
1997: Kwiksave failed to go ‘up market’
1998:
- Kwiksave bought by Somerfield
- Sold to BTTF - sell each store - Kwiksave shuts (2007)
2009: Co-op buy Somerfield

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24
Q

How did Sainsburys grow post 1996?

A

Expansion to US -> increased share prices

Growth of retail banking - first retailer to do this

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25
What drawbacks to growth did Sainsbury face post 1996?
Concentration of AB pop only E-commerce: refused to serve people outside M25 boundary Lost key battles with Tesco Moved down to joint 2nd
26
How did ASDA grow post 1996 to be joint 2nd retailer?
1996: Operation Breakout 1997: Spice Girls marketing campaign - more mums 1991: Wal-Mart takeover for £6.2bn George clothing ASDA living discount rage 2011: purchased Netto
27
How did Tesco grow to no.1 post-1996?
PPG6 foresite (bought up sites pre-rule) Niche spatial marketing -> invention of new stores to match geodemographics (convenience, express stores) Beats Sainsburys for new space -> won battles for Scotland & Rep. of Ireland -> internationalised Successful e-commerce; creation of Dark stores
28
How had the order of retail hierarchy changed from 1980s -> early 21st century?
1) TESCO 2) ASDA/SAINSBURY 3) SAFEWAY 4) CO-OP/MORRISONS (Somerfield & Kwiksave gone) (Intro of Aldi & Lidl)
29
How did Co-op grow to be a major player?
2009: buys Somerfield Appeal to working classes -> Rochdale pioneers (take Lancashire)
30
How did Morrisons rise to be 4th largest retailer?
Always strong in Yorkshire Est. 1899, Bradford 1967: enter stock market 2009: purchase Safeway Now 4th with 618 stores
31
How have Aldi, Lidl & to an extent, Netto, grown?
Aldi & Lidl grown from 3-5% market share since Sept 12 Lidl nationally spread Aldi concentrated in North & Scotland Looking to go upmarket
32
What are community hubs & food banks?
Create for very poor Free, out of date or 'not good enough' food 2010-14, no. of food banks increased from 61,000 to 350,000 under Cameron's austerity measures
33
How much of the market belong to convenience stores?
21% market share Approx. £40bn
34
What are symbol group stores?
Independently owned franchises: - Spar - Premier - Londis - Costcutter
35
Why does M&S have a unique spatial geography?
'On the go' customers (ready meals) City workers; motorway services; train stations 45% ready meals
36
What is a food desert?
Major impact of OOT centres A geographic area where residents cannot readily access food Usually a straight line distance of 500m without a shop
37
Where was the term food desert first used?
1995, UK government report defined as: population areas with little or no food provision
38
Where are food deserts most common?
Rural/deprived areas
39
What is the food desert case study & who is it by?
Seacroft, Leeds Wrigley et al 2002
40
What were the identified social issues in Seacroft?
70% less fruit & veg than national average 30% heavy smokers 61% of estate on benefits 40% earning less than £10k a year
41
What were the policy options for Seacroft?
Develop local, small shops -> skilled workers in area Increase internet usage to increase e-commerce & home delivery Creation of new stores -> Tesco Extra entered Seacroft but local shoppers scared to enter incase spent too much
42
Why was internet not an option in Seacroft?
Positive relationship between food deserts & internet deserts Lack of access to computers Delivery drivers now refuse to go through some areas - some places inaccessible for home delivery
43
What was Shannon's 2013 critique of food desert researchers?
Nicknamed retail geographers neoliberal paternalists Trying to bring social order to dysfunctional communities Telling communities they have mismanaged lives Trying to normalise middle class food-scapes Talking of obesity etc = body fascism Conflicting evidence of link between food deserts & health/diet
44
What are the impacts of food deserts on the high street?
Town centre decay Loss of bulky goods/food Vacancy rates increase Charity/cut-price shops arrive Increase in betting shops Rise in no. of ethnic/international convenience stores
45
How much retailing occurs on high street?
Less than ½ & falling
46
Since 2001, by how much has the no. of UK superstores increased?
35% All other forms of grocery outlet have fallen
47
Why was Marty Portas' ideal town unsuccessful?
Failed to geographically differentiate One size fits all model Doesn't work across whole of UK
48
Why do retailers internationalise?
Home market saturation Cost/profit advantages Recognise global centres, e.g. fashion capitals Relaxed planning environments Recognise global consumer (McDonalds) Entrepreneurial vision Chasing economic growth (China) Serve existing customers abroad (M&S in overseas holiday & work locations) Necessity to grow - Stock market demands growth - Increased investment if companies can show investors plan for growth
49
What were the PUSH factors for Ahold & Sainsbury's move to America?
Home saturation Fierce competition in Europe
50
What were the PULL factors for Ahold & Sainsbury's move to America?
English speaking/culture (Sainsbury) Weak structure of US Market
51
Why was the US market structure weak?
Up to 1980s - Anti-trust legislation - Preventing huge retail growth & increased market share Reagan came to power & relaxed laws - Increase in acquisition - Leverage buyouts - buy vulnerable companies
52
How did Sainsbury take America?
1987: buys Shaw for $287 million Initially organic growth 1996: buys 20% of 'Giant' stores Expand into New Jersey & Pennsylvania JIT production
53
Who is the toughest competition in the American food retail market & why?
WALMART est. 1946 2005-6: opened 60 discount stores, 500 supercentres, 300 internationally
54
Sainsbury lost Giant to Ahold, what did they do?
Bought 'Star markets' in Boston for $298 million
55
What are the 6 growth strategies?
ORGANIC (e.g Sainsbury) MERGER ACQUISITION JOINT VENTURES STRATEGIC ALLIANCES (Ahold) FRANCHISE (Bodyshop)
56
What are Burt et al's 5 reasons for retail failure internationally?
1) Market failure 2) Competitive failure 3) Political factors 4) Business failure 5) Operational failure
57
What is market failure?
Misunderstanding the market - Market size - Demand of market
58
What is competitive failure?
Competition in destination country too fierce
59
How did Sainsbury fail abroad?
Dominated Boston but competition too fierce from Ahold 2004 - sold all American assets
60
What are political influences in retail failure?
Inflation, war, political conflict American & British companies struggle abroad
61
What is Business failure & how did M&S suffer?
Internal failure that affects internationalism
62
What is operational failure?
Lack of money, finance etc
63
What are private equity companies?
Invest money on behalf of investors e.g. pension plans, financial institutions, insurance companies, banks etc
64
Why does Britain import 50% food?
Price -> import cheap to keep costs low Seasonality Consumer choice -> influence of a global world Trade liberalisation Quality Large scale (food) production -> fewer producers; large ones benefit from economies of scale -> lower costs
65
What are the issues with global sourcing?
1) Shops avoiding wholesalers -> straight to producers 2) Food miles & carbon footprint 3) Food security -> what happens if there's an oil strike 4) Ethics 5) Globalisation of diets -> can be harmful to some cultures' body types
66
Case study: cut flower market, Kenya
Positives: - 300 farms employing 500,000 people - 20% of Kenya's exports ($250 million) - Manual farming = decreased carbon footprint Negatives: - Intensive irrigation systems - Transported by air - Decrease in biodiversity - Population explosion -> development of squatter settlements around farms

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