Industry Analysis & Industry Trends
The performance of supermarkets is dependent on consumers' incomes and their willingness to spend. Many of the products they sell are considered non-discretionary – the kind of spending that consumers are unlikely to abandon unless faced with severe poverty. Given that large supermarkets can buy cheaply and sell at low margins, this means supermarkets can actually benefit from poor economic conditions like those that have been prevalent over much of the past five years.
Over the five years through 2014-15, industry operators have exploited the fact that consumers have wanted to minimise their spending and have taken revenue from independent convenience stores, department stores and specialised food retailers... purchase to read more
Industry Report - Starting a New Business Chapter
New entrants to the Supermarkets industry face significant hurdles. Foremost among these is the substantial outlay required to build a new store and to fill it with sufficient stock. Locating a suitable site for a new store is also challenging, unless an existing store has recently shut and the space is available. The sheer size of most supermarkets makes their store space unsuitable for most other stores. Once established, annual capital costs are low, meaning that competitors face a more favourable cost environment. These lower costs are responsible for another major barrier: the industry is very mature with well-established large players who can afford, and are willing to, price their competition out of the market if feasible... purchase to read more