Industry Analysis & Industry Trends
The Supermarkets industry has changed radically over the past five years. The lingering effects of the economic downturn, extensive changes in consumer shopping habits and the aggressive expansion of discount supermarkets Aldi and Lidl have shaken up the industry. In March 2014, Tesco and Morrisons sparked a price war by announcing large price cuts. Asda and Sainsbury's following suit over the year, announcing similar cuts to prices. This price war was primarily designed to stall the advance of discount supermarkets, which have benefited from rising market shares in recent years. Further to these events, the industry's largest company, Tesco, became embroiled in an accounting scandal in mid-2014, which resulted in large-scale management changes within both Tesco and the wider industry... purchase to read more
Industry Report - Industry Investment Chapter
The Supermarkets industry has a moderate level of capital intensity. Using wages as a proxy for labour and depreciation costs for capital, IBISWorld estimates that for every £1.00 spent on labour, industry operators spend 22p on capital. Even though wages absorb a relatively small slice of total revenue, capital is not a major expense either, since there is little need for equipment beyond a small quantity of lifting equipment and in-store checkout equipment.
Wages in the industry are low primarily due to the low skill requirements of its staff. Most employees operate checkouts, provide customer service or restock empty shelves... purchase to read more