B122 Tma 1
1647 words 7 pagesIn 1999 Asda became a subsidiary of the largest retailer in the world, Walmart. Asda operates within the UK grocery market and currently rank second. Asda's main area of business falls into the food sector and boast 500+ stores nationwide.
Asda is a variety retailer stretched over numerous sectors, which include, entertainment clothing and footwear. It is considered a multi-channel retailer, with a blend of store locations and growing online presence.
Asda's stores are traditionally, large purpose built units located on the outskirts of a town, much like Walmart stores in the USA. Similarities continue throughout the UK operation, with the Walmart culture permeating through stores amongst all 143000 'Colleagues'. Furthermore, …show more content…
In order to identify Asda's competitors, firstly I need to establish the number of other retailers and their size also operating in the same sector, food grocery. According to market share statistics, in the 12 weeks to 7 Aug 2011, based on similar sized operation, Asia’s direct competitors were Tesco, Sainsburys and Morrisons. This is highly saturated sector due to the number of large retailers operating within it.
12 wks to 7 Aug 2011 Tesco 30.5 % Asda 17.1 % Sainsbury’s 16.1 % Morrison’s 11.7 %
Further competition may come from retailers entering the sector. A high number of entrants may indicate the market is highly competitive, however, high levels of retailers will also leave if the competition is just too high. Kwik Save is a good example of this, 'It struggled to make profits in the 21st century as superstore operators such as Tesco[->1] and Sainsbury's[->2] introduced their own budget brands (wikipedia.org,2012).
Kwik Save promoted themselves as a low-priced grocery retailer. Kwik Save are expected to make a return to the market this year and may become another threat to Asda as they previously operated by similar strategies.
Establishing which of the competitors offer products most similar to Asda's assortment will be another indicator, as the level of competition will intensify where a competitors assortment proves to be a suitable