Macro and Micro Environmental Analysis of Waitrose Supermarkets

WAITROSE ASSIGNMENT INTRODUCTION TO MARKETING MARKET explore CONTENTS INTRODUCTION &8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 MACRO ENVIRONMENT POLITICAL &8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- ECONOMICAL &8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- neighborly &8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- TECHONOLGICAL&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- ENVIRONMENTAL&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- MICRO ENVIRONMENT SUPPLIERS&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- INTERMEDIARIES&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212-FINANCIAL&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 GOVERNMENT&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 THE COMPANY&8212&8212&8212&8212&8212&8212&8212&8212&8212 &8212&8212&8212&8212&8212- EMPLOYEES&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- CUSTOMERS&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 COMPETITORS&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- MEDIA&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- PUBLICS&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212- organise ANALYSIS&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212CONCLUSION&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 APPENDIX&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 BIBLYOGRAPHY&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 INTRODUCTION The nutrition retail constancy in the United Kingdom is an extremely competitive solid alimentstuff. The major shammers in the industry whatever give trem dismissous purchasin g former and be constantly fighting to step-up trade sh be. Like nigh(prenominal) otherwise industry though they argon asked entirely positionors which atomic number 18 some(prenominal) within their control as salubrious as outside.In this enunciate we onlyow scratch gear be focusing on the macro environs of the UK supermart industry where we go outside re get wind external matters such(prenominal) as politics, economy, technological, neighborly/demographic and environsal eventors. From this analysis we goat gain insight into how super food grocery store stores fight to commutes that be beyond their control and how they sess practic completelyy turn these changes into fear opportunities. The second part of this report depart be looking at the super grocery chain Waitrose.Through this we analyse the micro environment whereby we look at factors such as suppliers, intermediaries, financial, organisation, the social club, customers, employees, comp etitors, media, and publics. The micro environment is what determines up a c anyer and on the whole aspects must run efficiently and effectively for a crease to succeed. Based on the findings of the Waitrose micro environment we are then suit fit to evaluate the companies strengths and impuissancees as well as their opportunities and threats. MACRO ENVIRONMENT authoritiesal The supermarket industry is affected by numerous varying political factors. spick-and-span legislation and decisions from Governing bodies that regulate the industry aim to ensure that all(prenominal) argumentation within the sector is conducted bring togetherly and with the economy suppliers and consumers outdo enliven in mind. Most legislation on food standards originates from the European accusation which consoli durations legislation across the EU. The argument Commission, a non departmental governing body, are responsible for investigating mergers, markets and inquiries related to regulate d industries d receivestairs competition legal philosophy ( argument Commission No particular date),.Competition Law which was anteceded in 1998 promotes vigorous competition, and bans anticompetitive agreements amongst firms such as agreements to fix prices or to carve up markets, and it makes it unratified for businesses to abuse a dominant market position ( perspective of Fair Trading, 2007). In 2009 the Competition Commission issued an am hold backed and improved market Supply reckon of Practice (GSCOP) with hopes of providing enormouser security to suppliers. To economic aid regulate legislation and the GSCOP an nonparasitic financial ombudsman was established in 2010 to resolves problems among retail merchants and suppliers (Sourceuk 2009).When a supermarket wishes to build or ex be given a site a competition test would be carried out on the retail merchant and an assessment do to ensure that topical anesthetic anaesthetic anaesthetic surfs dont lose out to the large chain supermarkets command an entire area (Competition Commission 2009). Price fixing is illegal under the competition act of 1998. When participants on the same side of the market (such as the big 4 in the UK supermarket sector) agree to sell a tendinger, proceeds or commodity at a fixed price its the consumers who must feed tour retailers and suppliers reap the benefits.There are extremely heavy penalties for price fixing in the UK You can be fined, alter from being a director or even sent to prison house (Business Link No while). stripped wage laws go out al bureaus affect supermarkets as publicly many of their staff would be paid minimal wage. Under the national Minimum Wage Act of 1998 all employers must pay their employees a sealed amount per hour as lop by the UK political science. The of import rate of National Minimum Wage which applies to hunt d accepters develop 22 and over and is before recollective ? 5. 80 per merely provide extract ? 5. 93 in 2010 (Directgov 2010).There are many laws in the UK and EU which are designed to protect the environment. However in that respect are devil main Acts which were made to consolidate as many issues as possible, these are the environmental Protection Act 1990 and the Environment Act 1995 (Hartshorne. J,1996). DEFRA is the UK government power which is responsible for setting legislation and guidance on a modus operandi of environmental issues (DEFRA, No Date). Some all important(predicate) legislation which applies to supermarkets embroil laws on waste and recycling, ge clear upic modification, and mode interchange which are all cover under these acts. Office of Public Sector instruction No Date) sparing The economic situation at any given quantify result forever affect market conditions. As the economy continually fluctuates amidst periods of economic growth and periods of relative stagnation ( likewise kn knowledge as an economic cycle) factors such as changes to interest rates, exchange rates, inflation and purchasing power go forth directly and indirectly affect the supermarket industry (Tutor2u, No Date) In 2008 the UK had entered the recession stage of the economic cycle. Interest rates dropped from 5% to 0. % in an effort to outgrowth consumer spending (Mintel 2009, securities industry Re-forecasts pabulum UK). And while this would initially appear to be a gain for supermarkets, other factors of the recession such as wide spread unemployment and bankruptcies saw this sector of the market having to alteration their trade strategies in order to weather these changes to the economy (Mintel 2009, market Re-forecasts victuals UK). In 2009 trading was lot with consumers eating less ready meals and opting for own snitch rather than premium produces (Mintel 2009, aliment retail UK Broader Market Environment).This is skilful maven of the many changes to consumer purchasing that changed and will continue to change as the eco nomy tries to recover. According to The Office of National Statistics (2010) unemployment dropped by 33000 since then end of 2009 and the economy grew by 0. 1% a possible indication of the UK slow emerging from the recession (BBC word 2010). However this will be the reference of a reco truly which could take at least a nonher deuce historic period. As interest rates still remain at an all time low of 0. % (BBC News 2009) supermarkets will start to see an add-on in spending from consumers as their confidence in the market move overs (Mintel 2009, Market Re-forecasts nourishment UK). Inflation has only become a repenny issue in the UK economy. Rising fuel prices, a few poor harvests and the weakness of the sterling has seen inflation accelerate betwixt 2006 and 2008 (Mintel 2009, Food retail UK Broader Market Environment) (Appendix 1). The implications of this for supermarkets are that it erodes the purchasing power of m superstary which in turn message the price of importe d good will rise.However a demonstrable result of rising inflation, which at multiplication reached over 10% also, meant that food price gravelions boosted sales value (Mintel 2009, Food Retailing UK The Market In Context). A trend for customers trading down rather than reducing mensuration enables sales value to rise fast enough to cover embody growth (Mintel 2009, Food Retailing UK Sector Size and Forecast). The recession as a unanimous has had a very mixed effect on the supermarket industry. At the beginning of the recession in 2008 consumers drastically cut cover version on purchases from retailers such as Waitrose and Marks and Spencer.However by celestial latitude 2009 Waitrose was the fastest ontogenesis supermarket chain while Aldi was on the dec downslope. This is imagined to be payable to to a greater extent expensive supermarkets introducing own dishonor harvestings into their stores and selling them at a overthrow price to their standard increases (Keyno te 2010, Food labor Industry Overview). genial It is substantive for supermarkets to understand the current socio pagan environment as any changes will affect their customers needfully and wants. (Brassington &038 Pettitt 2006)According to Mintel (2009) the ageing state will flummox a negative effect on the supermarket industry with there already being more(prenominal) retired people than children, with this level set to increase (Appendix 2). This will affect the industry as older people tend to eat and drink a lot less than their younger counterparts merely also treat themselves less as well. This decline in field goal size will view long term effects for the industry over time as they are less efficient to return and require more staff (Mintel 2009, Food Retailing Broader Market Environment)A worrying trend which has emerged in the last several historic period has been the increase in obesity among children and adults in the UK with 60% of the UK population being g ravid (Office of National Statistics, health and Social Care, 2010) Poor fictional character convenience foods, labour-saving technology, increase car use and more people doing sedentary jobs are unless some of the reason the country is getting bigger. However despite this increase in obesity the U. K population on a whole is far more health conscious than in previous historic period (Keynote 2010, Food Industry Industry Overview).There has been a trend away from genetically modified foods towards organic foods and an increased the customer desire for healthy alternatives. The government and other health organisations are change stateing with supermarkets and manufacturers to help consumers make healthier choices when obtain. (Keynote 2010, Food Industry pesterer Analysis). According to the National Office for Statistics (2010) The UK population is increasing at an alarming rate with figures steering the population of the United Kingdom to be at 61383000 in 2008.This is up 0. 7 per cent since mid 2007. Increases in births, decreases in death and a aggressively rise in migration to the United Kingdom book all leadd to the change in population (Office of National Statistics, Population Estimates 2010) Statisticians bind said that at least 70 per cent of the population rise over the contiguous 20 years will be attributable directly to immigration (Office of National Statistics, Migration 2010). The supermarket industry needs to reflect the needs of the changing population.With more people with different cultural backgrounds residing in England it is essential that the needs of these clean consumers are being met by supermarkets in order to retain market share (Keynote, Food Retailing UK 2009) The over powering proposition of the eachthing under unity roof format has been a major factor in the destruction of the wee independent grocer, butcher and green grocer in recent times thus replacing the gamey street as the focal institutionalise of community life (IGD 2009, Non-Food Retailing).Declining meal preparation consequent to demographic changes such as an increasing number of single-person familys and working women is forcing UK retailers are to focus on added-value harvests such as the booming food-to-go sector (Keynote 2010, Food Industry PEST Analysis).. These demographic changes study also affected consumer work patterns with retailers modifying aspects of the customer obtain experience to accommodate changing lifestyles. Supermarkets are now flexible in opening hours as well as adding extras such as thorium late night shop and free parking facilities (Keynote 2010, Food Industry Industry Overview).The recession in the UK has changed the populations attitude towards the foods they purchase. Britons have developed a sophisticated customer preferences and regards for greater choice and treasure in the shopping experience but for lower prices. Supermarket own sword products have been on the incline as their pictures often offer great value for timbre products. (Keynote 2010, Food Industry PEST Analysis). Technological mod-fashioned technological advances have enabled supermarkets to provide customers with a firmer, easier and more enjoyable shopping experience.In recent years we have seen the introduction of online shopping, self cheque outs, product examine and forecast technology which has changed the dynamics of how people shop. one(a) of the most influential technological changes to happen to the supermarket industry in the former(prenominal) few years has been the introduction of net income shopping. The online grocery store market is currently worth ? 4,4 billion having doubled in the past 4 years (Mintel 2009 Online food market Retailing) and is set to reach ? 7. 2 billion buy 2014 label to re nigrifych industry analyst IDG (Appendix 3).This is a major advanced fortune for retailers and the UK offers a good market for this with the upliftedest percentage of people online across the EU (Just Food 2009). New scanning device designed to be apply by shoppers to scan products as they shop and then simply gainful at a self serve checkout using the scanned date are a new introduction to the industry. Scales are then apply at point of payment to weigh shopping against weight info which is provided when the product is scanned. This ensures much shorter queuing times for customers (Waitrose 2010)New communication technology such as the introduction of scanners which provide price labels and barcodes for any stock that needs to be conquerd has enabled more sophisticated store management. The scanners minimise unsold food as well as check out productivity, which saves time and reduces waste. (Retail Systems 2010) Advances in forecasting software such as that developed by SAS and purchased by Waitrose in 2006 will help forecast demand for product based on the history of the item, casual variables, events and holidays. (SAS 2006)The introductio n of self check outs into supermarkets has bought many advantages to both the supermarket sector and its customers. This technology allows customer to scan barcodes on their won items thus eliminating interaction with supermarket employees. piece they are a comparatively new concept, having only become wide spread in 2003 they have been accepted as a faster, more efficient and private way to shop. Through self check out transcriptions supermarkets are also able to reduce staff requirements and save money (Goliath 2005) EnvironmentWith the environment get an important topic over the last several years it has been essential for supermarkets to fulfill the demands of both the Government and their customers with regards to addressing environmental issues. This has proved to be both a challenge as well as a business fortune for the major players in the industry, who strive to try and reposition themselves as leaders in responsible sourcing, baffleability, climate change issues and recycling (Donohue. A 2007). Climate change is one of the greatest challenges facing the world today.The UK government has a long term plan to reduce emissions by 80% by 2050 (Department of Energy and Climate budge A Low carbon paper UK 2008). The Climate miscellanea Bill and the Committee on Climate Change influence have raised consumer knowingness of climate change which target pressure on the supermarket industry to meet their environmental obligations (Department of Energy and Climate Change Legislation 2008). Many UK supermarkets are now part of a government initiative known as the Waste and Resources Action political platform (WRAP). WRAP works with the food industry is an effort to reduce food and case waste.Retailers who have signed the Courtauld Commitment (a voluntary agreement amid companies and WRAP) agree to have absolute wastage reduction by 2010 (WRAP No Date). The Food and Drink Federation (FDF) with its green agenda for food and drink manufactures also play a key role in helping companies reduce emissions and waste as well as cutting the amount of packaging that reaches households (FDF No Date). The Department for Environment, Food and Rural Affairs (Defra) works with the government and consumers in an effort to reduce waste through recycling and composting of household waste (DEFRA No Date).This has created more consumer awareness and this new found awareness puts pressure on food retailers to meet waste reduction targets (Appendix 4). Waitrose currently puts into practice the use of the troika Rs (reduce, reuse and recycle) to remove waste away from landfills (Mintel 2008 Ethical and Green Retailing) Sustainable sourcing has become a very existent issue with consumers over the past few years with a demand for supermarkets to ensure that their produce such as tip and meat are from sources that can be replenished.Another form of sustainable sourcing is for supermarkets to source their produce locally rather than importing from ov erseas. This has a enormous impact on carbon use as well as a epochal impact on creating sustainable economies in our local communities (Mintel 2009 Influence of the Environment on Food Shopping). MICRO ENVIRONMENT Suppliers stinkerhand its 18,000 different products, Waitrose is supplied by 2500 firms in over 60 countries. The absolute majority of them are itsy-bitsy scale and regional producers. Waitroses main aim, to offer noble quality product, is the base of its plan to source goods from the areas where it trades.For example, that will show the real taste of British food with its regional renewal. furthermore people will have easy access to buy local food and defend its local economy. Regardless of the fiddling or big producers, Waitrose aim to work with decency and respect in long term with its suppliers. It wants to help its suppliers to reach their objectives by ensuring them that it will life the integrity or quality of the suppliers product. For this reason, Wa itrose wants its producers to use mallable and with the best quality ingredients for the food, not a list of chemicals such as stabilisers or preservatives. Waitrose. com. The Waitrose downhearted Producers Charter) To succeed in that approach, the family presented a new Waitrose Locally Produced identify, which will aim to offer the best local quality food and great customer service to its customers. The difference between Waitrose and the other UK retailers is the co-ownership of company by its staff, not the public shareholders who only demand for quick and profitable return of their investments. It allows it to make long term growth plans and continuing relationships with its producers in order to face its great customers expectations. Waitrose. com. The Waitrose Small Producers Charter) In order to prove their donjon for small local producers, Waitrose teamed up with The Times to create The Small Producers Awards in 2001. For example, its first year category winners will receive ? 7,000 in cash, plus access to Waitrose business and marketing expertise. (Waitrose. com. The Waitrose Small Producers Charter) Moreover, in relation to the UK Recession, followed by the consumer downturn, Waitrose asked 1000 suppliers to cut their prices with 2%.The request was addressed mainly to suppliers of brand food and farmers in UK. The managing director Mark Price explained companys decision with the fall in commodity prices, which makes suppliers raw material cheaper. Furthermore he states that the Waitroses market growth will lead the suppliers to sustain profit, which they should share with their biggest buyer. Moreover tooshie Lewis coalitions decision was compel by the annual report of the company, which unveiled 26% fall in pre-tax profit for 2008 to ? 279. 6m. (Telegraph website, 12/03/09)Intermediaries By rewarded as the UKs favourite retailer for 2007 and 2009, Waitrose main aim is to sustain its loyal and respectful relationship with its suppliers and partners. It is the main intermediary of its own branded goods. Furthermore, Waitrose nurture long-term relationships with its suppliers, paying the fair price and helping them to reinvest in their business. It is the most established local sourcing initiatives in its sector. All Waitrose shops have a regional offering, which covers in excess of 465 producers preparation over 1,400 product lines.In order to ensure its pledge for UK suppliers and in response to customer feedback, Waitrose has developed new shelf-edge ticketing, which emphasise the county, origin and unique(p) qualities of each product. (JLP annual report 2009) Moreover, Waitrose cooperate with other intermediary companies in order to transfer the produced goods from its supplier to the customers. Its main distributor is the online supermarket rescue company Ocado. It operates mainly in Greater London, covering over 3 million households. Their relationships evolved in 2002 when John Lewis federation bought 29% o f Ocados shares.In accessory, their gouge will expire in 2013. Apart from Ocado, Waitrose has established an own online delivery in over 100 stores. (JLP annual report 2009) Financial In difference from the other UK retailers, Waitrose isnt own by public shareholders and the City. In stead of cruel shareholders, whose fixed idea is to gain profitable quick returns, Waitrose is a part of John Lewis Partnership, which is owned by its workers. Each year, any partner share companys profits, which in others retailers go to the shareholders.This organisational system makes extraordinary commitment and homage amongst its labour. Furthermore company could praise itself with partners who worked with it for many years. This system makes its workers to be interested in what they are doing and selling. For that reason the often good remarks of the customers about the customer service are not surprising, because either worker in the local store do in fact own the store. (Waitrose website. T he Waitrose Difference) Moreover, an interest public fact is that Waitrose holds a over-embellished Warrant with Her lavishlyness The Queen.This means that company is chosen to add together the over-embellished Family with goods for fiver years. Moreover, Waitrose held the long-lasting Warrant with Queen Elizabeth The Queen Mother. That is a significant evidence for the great quality that Waitrose has been offering through the years. (Waitrose website. The Waitrose Difference) Government As an established responsible and reliable retail company, Waitrose aim to realise and follow government constitution. It is in a consistent relationship with any local government, discussing key issues which affect its partners, customers and communities in which it operates.Furthermore it is an active section of government policy advisory groups, such as Climate Change Leaders Group, British Retail Consortium and Retail Energy Forum. (John Lewis Partnership website, Engaging our stakeholde rs) Moreover, Waitrose cooperate with local authorities during planning and construction of all its new shops. It wants to ensure that its new stores are built responsibly and will operate sustainably in order to diminish its impact on the environment and the local community. (John Lewis Partnership website, Engaging our stakeholders)Lastly, Waitrose and its parent John Lewis Partnership work closely with regulators such as Environment Agency and Health &038 natural rubber Executive to inform that the Partnership do all its best in compliance with the law. In any case of legal issue occur, it act immediately, and cooperate with the local regulator to resolve the problem as quick as possible. (John Lewis Partnership No Date, Engaging our stakeholders) The Company Waitrose stems from a small grocery shop called Waite. Rose &038 Taylor founded by Wallace Waite, Arthur Rose and David Taylor the small grocery shop opened for business 1904.Four years on the founders distinct to rebran d the company in 1908 by changing the company name to Waitrose, which is a combination of two of the founders surnames. The Waitrose Company desired changed once again so joined The John Lewis Partnership 1937, whereby 160 Waitrose employees became partners or co-owners of the business (Waitrose No Date The Company). The John Lewis partnership is formed by 70,000 partners (staff) who co-own John Lewis department stores, Waitrose supermarkets, an online and catalogue business (John Lewis Direct-johnlewis. om), a direct service company (Greenbee), trinity production units and a farm. (The John Lewis Partnership No Date) (John Lewis Partnership CSR get over 2009, Page 5) The Waitrose difference Waitrose focuses operation around offering the best quality goods and have adapted their daily producers, to make shopping easier to suit all by offering a distinctive service such as packing at checkouts, carry to car service and assists to those that required it it is this that they believe gives them the edge over other supermarkets (Waitrose No Date The Waitrose Difference)Waitrose has an exceptional return policy whereby customers will receive their full money back, if they genuinely pursed t a product they didnt require or a customer is not one hundred percent happy with the product. It is this edge that provides Waitrose with long lasting loyal customers that trust the supermarket they shop in. As well as food products Waitrose offers Branch Extras at selected stores enable customers to rent wines glasses, beer glasses and tilt kettles free of charge as a friendly jester(Waitrose No Date The Waitrose Difference).Waitrose commitment to provide outstanding produces and services has been credited with a magnificent Warrant from Her Majesty the Queen Which is a mark of recognition of those that supply goods or services to members of the Royal Family for at least five years(Waitrose No Date The Waitrose Difference). Employees Waitrose employees are also co-owners and form part of the John Lewis Partnership the John Lewis Partnership aims to employ exceptional staffs that are dedicated to put the consumers needs first whilst delivering excellent customer service.The John Lewis Partnership aims to keep the happiness of its employees at the heart of the partnership and uses a blend of five key elements to do this Work/life balance employees are boost to keep a allude balance of work and play to support this the partnership offers flexible hours, life breaks, long leave, a flexible insureaway policy . Competitive pay and benefits the partnership aims to maintain a pay policy which is competitive while being fair to all partners and offers a range of partners benefits from discounts and bonus to life insurance. Filling potential the partnership gives all their employees the chance to reach their full potential and required all employees to ender go compulsory training. There partnership also allows employees the opportunity for promoti on and career development programs. Fair treatment the partnership treats all its employees fair and provides equal opportunities for all, regardless of age, gender, ethnicity, social background, religion and disability or sexuality. Powered by our Principles (PboP) these are six principles sets out to inform employees of what is expected from all them be honest, give respect, recognise others, show enterprise, work together and achieve more (Waitrose No Date Our Employees) Customers The John Lewis Partnership aims to deal honestly with customers, securing their loyalty and trust by providing outstanding choice, value and service. (John Lewis Partnership CSR Report 2009, pg 4) Waitrose dominates a niche market were its target customers are believed to be affluent with a more flexible disposable income.They are associated with the midpoint discriminatees along with game class food and fantastic customer service. Their repeat custom is formed, as the consumer seeks a well estab lished supermarket they can trust and complete their each week shop in a supermarket thats driven by eminent quality cherubic food. (Mintel 2009 Food Retails Waitrose) A loyal Waitrose customer will complete their weekly shop unconditionally every week in there local Waitrose store however if they need a product unexpectedly they will use a convenient store as a one off it is it nearer in location.Typical Waitrose customers are considered to be affluent with a more flexible disposable income, middle to high classes, working professionals and health foc utilize consumers (Mintel 2009 Food Retails Waitrose). In addition another important factor that adds to the customer that shops at Waitrose supermarkets is the location of the stores as Waitrose stores are based more South/East England and areas that are frequently referred to as posh, where people are financially comfortable (Mintel 2009 Food Retails Waitrose).Waitrose strive to maintain exceptional customer service and are a lways constantly evaluating their services to unsure they are fulfilling their consumer needs. Waitrose uses a range of prescribed methods of re singech and feedback, such as customer works, panels, focus groups, online feedback forms and regular arcanum shopping to gather sufficient evidence to monitor their customer service and performance necessary action if required (John Lewis Partnership No Date Customer Service) CompetitionWaitrose occupies up to 4% of the UK grocery market, this compares with the largest food retailer in England today is which is Tescos who hold a massive 30 % share of the market. In the UK today every ? 1 in every ? 7 of consumer spending is spent in one of Tescos stores. Tesco specializes in the first place in food and drink with its Value and Finest ranges that we all know well, but it has also become a major player in a range of non-food markets including consumer electrical, clothing, financial services, telecoms, fuel and internet services amongst others.In 2008, Tesco launched a new Discount Brands range, which is geared towards consumers seeking to trade down but not ready to com shout out on quality. The new range appears to have halted the drift of customers to Aldi and Lidl. Tescos sheer scale means it has been able to lower prices on the back of large volumes. Tescos has different types of stores every one of them targeting different consumers, tesco express for example, the smallest one in the range, is designed to be a convenience shop where the costumer can Top-up (Mintel 2009 Food Retail Tesco). separate major players are Asda, Sainsburys and Morrisons with Asda taking up to 17% of the market. Asda has a confusable range of product to Tesco but opened up the clothing market in supermarkets but presenting its own brand known as George at Asda. Asda, part of Wal-Mart, directs its main focus on price, primarily targeting the lower end of the mass-market although the current climate is increasing demand for discount i tems from a variety of consumer groups. In terms of consolidated sales, in 2008 the company was the third largest grocer in the UK although when fuel sales are removed Asda moves into second place behind Tesco but preceding(prenominal) Sainsbury.What has really set Asda apart from its rivals in the food sector in the UK has been its lack of convenience store activity. While Tesco and Sainsburys have attacked the c-store sector very aggressively, Asda has been happy to maintain its larger big-box stores enabling them to maintain a presence out of town. (Mintel 2009 Food Retail) Waitrose occupies a relatively small but nevertheless very strong portion of the market with its closest supermarket being Marks and Spencer. Both of these supermarkets aim at a quality rather than quantity market with prices generally being high than the larger supermarketsMarks and Spencer holds approximately 3. 9% of the grocery market. The main differences between of the two chains is that Waitrose hol ds 18% of organic food ranges and sells none Waitrose brand products whilst Marks and Spencer sells just its own made brand. Marks &038 Spencer is the UKs track non-food retailer, but food has long been a part of its heritage. The company trades from a premium positioning, emphasising quality and value. Dry groceries are only a small part of the offer, with the company instead focusing on ready vigilant meals, fresh items and foods for special occasions.The food range is available from specialist hardly Food convenience stores as well as the larger general merchandise outlets. (Mintel 2009 Food Retail Marks &038 Spencer). In the food retail industry we find that there are two different orientated companies, price orientated and customer orientated. Waitrose aims at the customer orientated market and this has generally held them in good stead. The recent recession was a interrogation time for the company but their strong brand name appears to have weathered the storm and it ha s successfully retained its position.Media Waitrose takes its promotion and publicise poorly and has a very organised and wide range of media publicity. On they own website they have options to find press releases and press packs and it is optional to sign up to receive daily updates regarding Waitrose. They have affirmed their commitment by appointing heroical Union as the lead digital agency for Waitrose. The agency will relaunch the brands website Waitrose. com, as well as produce digital marketing for Waitrose Deliver, the brands online grocery shopping service.Waitrose uses television and advertising extensively to promote its products and services and has proclaimed recently that celebrity chefs Delia Smith and Heston Blumenthal will join forces in a collaboration that will see them appear in TV, press and online advertising for the grocer (Waitrose 2009) The company website now provides an option to find all the recipes that have been used on the show. In addition John Le wis, the stores sister brand, has launched a slick magazine customer magazine, which will be made available in all Waitrose stores, with an initial print run of 500,000.The launch is backed by an in-store marketing campaign (Mintel 2009 Food Retail).. Publics The company takes its public and social responsibilities very sternly and its basic philosophy is as follows- As a responsible retailer, owned beneficially by our employees, we believe that the long-term future of the Partnership is best served by respecting the interests of all our stakeholders Partners, customers, suppliers and the wider community. We look actively for opportunities to improve the environment and to contribute to the wellbeing of the communities in which we trade. (Waitrose Feb 2010 Press Centre) In 2008, Waitrose was the first UK food retailer to begin using Anaerobic Digestion (AD), a process which eliminates the need to shoot waste food to landfill sites. (Waitrose Feb 2010 Press Centre). Waitrose co mmits at least 1 per cent of pre-tax profits to charitable and community projects. They are also affiliated to providing support to overseas disasters through the British Red Cross and are tough in over 100 projects involving 16,000 people in South Africa rolled out to Ghana and Kenya.Their target is to increase activities in the field referred to above and to actively encourage participation in Sport and physical engagement in the UK. They have already diverted 50 per cent of their good operational waste food away from landfill and their goal is to divert 95 per cent by 2013. Waitrose is set to launch an environmental initiative inviting customers to call down eco ideas that it can implement into the business. Your Green Idea was launched on 15 run into 2010, following a soft launch of the website.It is clear that Waitrose is very committed to its social and public responsibilities and have a proven track point to support their mandate SWOT ANALYSIS Internal Strengths Waitr ose was one of the first retailers to develop own brands (after Marks and Spencer). Their own brand line carries over 18000 products including 117 lines in their Perfectly Balanced range which promotes a fresh and healthy lifestyle for their customers (Mintel 2009, Food Retail UK Waitrose). Waitrose differentiates itself strongly from other supermarkets. They have a more defined range of products with focus on high quality food and up-market products.They are extremely customer orientated and place great emphasis on customer service as one of their unique selling points (Mintel 2009, Food Retail UK Waitrose). According to a survey by Which Waitrose is the leading supermarket chain in food quality and range. exclusively ASDA was rated better than Waitrose for value for money (Which 2008) Having owned their own farms for over 70 years Waitrose prides itself on working with its farmers, growers and suppliers directly to ensure that only the highest quality food from the most ethical and environmentally friendly sources reach they consumers.This is support by its own inspections and farm assurance schemes (Waitrose No Date assembly line of our Food). Waitrose was the first ever winner of the title Organic Supermarket of the Year and have over 16 awards for wine purchasing and retail. These are just some of the many awards that have been claimed by Waitrose over the past several years (Waitrose Various Dates Press and Awards). Waitrose also holds a Royal Warrant with Her Majesty the Queen to supply goods to members of the Royal Family (Waitrose No Date The Waitrose Difference).Waitrose was the first to introduce self-scanning ( expeditious flake) in some stores, which demonstrates a willingness to innovate and offer a high service and reducing costs. Recent technological innovations that have been introduced in stores include printers which provide price labels and barcodes for any stock that needs to be decreased and hand held devices available to shopper s to use as a self scanning system. (Thompson. S 2010). The partnership with John Lewis gives Waitrose tested supplier links and economies of scale. Waitrose would peel to achieve the success it has today without the help of the partnership.The partnership also functions as a conglomerate therefore diversifying risk. The association with John Lewis improves Waitroses written report (John Lewis Partnership No Date). Waitrose has a strong culture of co-ownership due to the fact that its not owned by shareholders but owned by everyone who works for the partnership. Their staff are generally well motivated because they are partners and profits ultimately come back to them. Various other benefits (such as pension schemes) are what make Waitrose a good employer, with satisfied employees. Waitrose No Date The Waitrose Difference) Internal Weaknesses The distribution of the Waitrose stores is quite weak, especially in certain areas such as the south west of England, Wales, North-West of England, and Scotland. However their eruditeness of 13 Somerfield stores has lead to an amplification of distribution into the North of England and Wales (Chesters. L dimension hebdomad 2009) Own labels are the main segment within their product mix. Waitrose is very dependent on this product range with a majority of sales coming from its own brand.Larger diversification would be helpful to gain better strength in the market (Mintel 2009 Brands Are Supermarkets mash Out Brands) Waitrose also has the weakness of only supplying high quality, high price products. This could be seen as a negative factor due to the exclusion of an entire demographic of people in the lower class of the population who could be potential customers. However they have recently made attempts to increase their target demographic through the introduction of an economy range branded as Waitrose Essentials.This shows they have recognised a potential for expansion and this can lead to further developments in t he future (Finch, J butt on 2009) External Opportunities Further expansions throughout the UK would be useful to raise the splendour of the firm, gain market share and, weaken the competitors buying their own branches and up e-commerce. Also further acquisition of competitor stores such as the Somerfield stores purchased by Waitrose would lead to increased market share (Chesters. L Property Week 2009). Waitrose has an elaborate online shopping facility in place however, this as well is subject to regional limitation.Expansion of distribution channels for online shopping facilities would help Waitrose get their products to customers who live outside areas where branches are located. Setting up new partnerships with other companies will grant higher(prenominal) incomes because both companies could be able to buy larger amount of products with cheaper prices. New Partnership could also help Waitrose to diversify into other non-food products other than those that John Lewis already of fers. Waitrose has recognised this opportunity (All Business, No Date) External ThreatsA major part of Waitrose strategy on sales has been built on the sale of premium own brand products. Marks &038 Spencer, Tesco and Sainsburys have identified the sales of premium own brands as a lucrative segment with high margins and all three have a wide selection of premium products in store. Tesco and Sainsburys advertise on price which gives the perception of their products still being of a lower quality than those sold at Waitrose (Mintel 2008 Premium Foods UK) The recession while perceived to be coming to an end still has the potential to cave in many problems for Waitrose.When interest rate rise this year people will have less disposable income and may start to buy cheaper products and so shifting from Waitrose to other cheaper retailers. This could result in a loss in consumers loyalty and this would give direct advantages to competitors (Mintel 2009 Food Retail) Also due to the deba sed sterling there is a possibility that overseas groups could enter the market and increase competition generating the reduction of incomes and market share for each player (Keynote 2010 Food Industry) CONCLUSIONThe supermarket industry has gone through some important changes over the past few years. From our analysis of the macro environment we can see some main issues have affected the food retails sector. environmental issues are now at the forefront of everything companies do, with consumers not only demanding more for their money but more for the environment as well. Technology has seen the internet open up a whole new way of shopping and while its still the early stages there is great promise for the internet as a medium for food purchases. Society is changing in a way that will affect how people shop in years to come.Now with more people from different cultural backgrounds residing in the UK than ever before supermarkets must act fast to meet the new needs of a changing soc iety. New legislation has stop many key players in their tracks with plans for expansion as a new financial ombudsman now has the last word on whether a supermarket can expand in a certain location. The recession has had a major impact of the supermarket sector over the past couple of years. It has been the driving influences to a lot of changes which have been occurring in most of the major food retailers. While the supermarket industry is relatively ecession proof their customers are not and this has seen consumer trends of trading down and buying less. An analysis of the internal structure of Waitrose shows us a very strong company with high moral grounding and a lovemaking for customer service. They may not have such large market share as the big four but they are growing at a rapid pace and with the addition of their new Essentials range to their portfolio they are preparing to enter a whole new main rain cats and dogs market. They pride themselves on having great relationshi ps with employees and suppliers and are at the forefront of environmental issue such as sustainable ethical sourcing.Waitrose is a company that is heading in the right direction and while they are not without their weaknesss, distribution being a key factor, they are brilliance at recognising where improvements can be made and building towards a higher market share. 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