The Big Four Supermarkets
Grocery sales in the UK are dominated by Tesco, Asda, Sainsburys and Morrisons. These are known as the Big Four supermarkets. Whenever one of these companies publishes any significant financial updates, the national media gives it heavy coverage. This is because of the impact it might have on the supply chain network.
From food manufacturers and other suppliers, to haulage companies; there are hundreds of firms whose business is directly influenced by the activity of the big four supermarkets. Most UK consumers visit one of the big four at least once per week, which maintains the flow of UK business.
Almost three quarters of the grocery market share is taken up by these hypermarkets, with Tesco the dominant force. Tesco’s 3500 branches include smaller ‘Express’ and ‘Metro’ stores, as well as the standard sized units and the larger ‘Extra’ stores.
The retail landscape has of course changed lots since the turn of the century, with online shopping spawning the likes of Ocado. The big four supermarkets also have online grocery options, allowing customers to have their shopping delivered to their doorstep for a small fee. And now, with Amazon rolling out its own grocery delivery service, the big four have never experienced so much direct competition.
As far as the supply chain is concerned, most bricks-and-mortar businesses treat their ecommerce store like another branch. The stock still needs to go to that location just like a normal branch, but there is no direct customer contact. Asda, Tesco and Sainsburys also offer a ‘click and collect’ service, whereby the customer uses the convenience of online ordering but can then collect at their own convenience.
Whilst the big four are still the dominant force, there are other emerging general grocers. The discount retailers such as Aldi and Lidl have been steadily increasing their share in the market since the last UK recession in 2008. The tightening of household budgets was instrumental in the change of buying habits, but Aldi have also managed to focus on quality and luxury.
The truth is, there is now more choice than ever for the UK consumer. Tesco have pulled out of some of their international markets in order to focus on their core UK strategy. Asda is backed by the weight of American parent company Walmart. Sainsburys has just purchased Argos.
Morrisons will undoubtedly have to pull something out of the hat in order to keep up.
Add a Comment