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Service Analysis & Planning > RETAIL > Flashcards

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
Q

What drawbacks to growth did Sainsbury face post 1996?

A

Concentration of AB pop only

E-commerce: refused to serve people outside M25 boundary

Lost key battles with Tesco

Moved down to joint 2nd

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26
Q

How did ASDA grow post 1996 to be joint 2nd retailer?

A

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

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27
Q

How did Tesco grow to no.1 post-1996?

A

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
Q

How had the order of retail hierarchy changed from 1980s -> early 21st century?

A

1) TESCO
2) ASDA/SAINSBURY
3) SAFEWAY
4) CO-OP/MORRISONS

(Somerfield & Kwiksave gone)
(Intro of Aldi & Lidl)

29
Q

How did Co-op grow to be a major player?

A

2009: buys Somerfield

Appeal to working classes -> Rochdale pioneers (take Lancashire)

30
Q

How did Morrisons rise to be 4th largest retailer?

A

Always strong in Yorkshire

Est. 1899, Bradford

1967: enter stock market
2009: purchase Safeway

Now 4th with 618 stores

31
Q

How have Aldi, Lidl & to an extent, Netto, grown?

A

Aldi & Lidl grown from 3-5% market share since Sept 12

Lidl nationally spread

Aldi concentrated in North & Scotland

Looking to go upmarket

32
Q

What are community hubs & food banks?

A

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
Q

How much of the market belong to convenience stores?

A

21% market share

Approx. £40bn

34
Q

What are symbol group stores?

A

Independently owned franchises:

  • Spar
  • Premier
  • Londis
  • Costcutter
35
Q

Why does M&S have a unique spatial geography?

A

‘On the go’ customers (ready meals)

City workers; motorway services; train stations

45% ready meals

36
Q

What is a food desert?

A

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
Q

Where was the term food desert first used?

A

1995, UK government report defined as: population areas with little or no food provision

38
Q

Where are food deserts most common?

A

Rural/deprived areas

39
Q

What is the food desert case study & who is it by?

A

Seacroft, Leeds

Wrigley et al 2002

40
Q

What were the identified social issues in Seacroft?

A

70% less fruit & veg than national average

30% heavy smokers

61% of estate on benefits

40% earning less than £10k a year

41
Q

What were the policy options for Seacroft?

A

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
Q

Why was internet not an option in Seacroft?

A

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
Q

What was Shannon’s 2013 critique of food desert researchers?

A

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
Q

What are the impacts of food deserts on the high street?

A

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
Q

How much retailing occurs on high street?

A

Less than ½ & falling

46
Q

Since 2001, by how much has the no. of UK superstores increased?

A

35%

All other forms of grocery outlet have fallen

47
Q

Why was Marty Portas’ ideal town unsuccessful?

A

Failed to geographically differentiate

One size fits all model

Doesn’t work across whole of UK

48
Q

Why do retailers internationalise?

A

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
Q

What were the PUSH factors for Ahold & Sainsbury’s move to America?

A

Home saturation

Fierce competition in Europe

50
Q

What were the PULL factors for Ahold & Sainsbury’s move to America?

A

English speaking/culture (Sainsbury)

Weak structure of US Market

51
Q

Why was the US market structure weak?

A

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
Q

How did Sainsbury take America?

A

1987: buys Shaw for $287 million

Initially organic growth

1996: buys 20% of ‘Giant’ stores

Expand into New Jersey & Pennsylvania

JIT production

53
Q

Who is the toughest competition in the American food retail market & why?

A

WALMART est. 1946

2005-6: opened 60 discount stores, 500 supercentres, 300 internationally

54
Q

Sainsbury lost Giant to Ahold, what did they do?

A

Bought ‘Star markets’ in Boston for $298 million

55
Q

What are the 6 growth strategies?

A

ORGANIC (e.g Sainsbury)

MERGER

ACQUISITION

JOINT VENTURES

STRATEGIC ALLIANCES (Ahold)

FRANCHISE (Bodyshop)

56
Q

What are Burt et al’s 5 reasons for retail failure internationally?

A

1) Market failure
2) Competitive failure
3) Political factors
4) Business failure
5) Operational failure

57
Q

What is market failure?

A

Misunderstanding the market

  • Market size
  • Demand of market
58
Q

What is competitive failure?

A

Competition in destination country too fierce

59
Q

How did Sainsbury fail abroad?

A

Dominated Boston but competition too fierce from Ahold

2004 - sold all American assets

60
Q

What are political influences in retail failure?

A

Inflation, war, political conflict

American & British companies struggle abroad

61
Q

What is Business failure & how did M&S suffer?

A

Internal failure that affects internationalism

62
Q

What is operational failure?

A

Lack of money, finance etc

63
Q

What are private equity companies?

A

Invest money on behalf of investors e.g. pension plans, financial institutions, insurance companies, banks etc

64
Q

Why does Britain import 50% food?

A

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
Q

What are the issues with global sourcing?

A

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
Q

Case study: cut flower market, Kenya

A

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

Service Analysis & Planning (8 decks)

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