Business Performance of the Top Four UK Essay

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Business

Performance of the Top Four UK Supermarkets

The UK supermarket is dominated by four companies; Tesco, ASDA which is owned by WalMart, Sainsbury and Morrison's. In 2011, the four firms combined had a 75.8% of the UK market (Fooddeserts.org, 2012). With four firms controlling in excess of 75% of the market this is a highly concentrated market. The concentration has increased over the last decade; in 2002 the same four firms had only 64.8% of the market. Three out of the four firms have seen their market share increase over the since 2002, the only firm which lost market share, despite increasing sales significantly, was Sainsbury. Morrison's had the greatest increase with the acquisition of Safeway in 2003, this increased the market share, however, as part of the agreement Morrison's had to sell 52 of the Safeway stores following the acquisition, which is a factor in the decrease in market share in 2004. The majority if the stores went to Waitrose, with 14 sold to Sainsbury and several to the Co-op (Grocer, 2004). The annual market share of these four supermarkets is shown in table 1.

Table 1 Market share for the top four supermarkets in the UK 2002-2011

(Fooddeserts.

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org, 2012)

Year

Tesco

Asda

Sainsbury

Morrison

Combined market share

2002

25.9%

16.1%

17.1%

5.7%

64.8%

2003

27.0%

16.2%

16.2%

14.6%

74.0%

2004

28.0%

16.6%

15.7%

12.4%

72.7%

2005

30.4%

16.5%

15.9%

11.5%

74.3%

2006

31.1%

16.6%

16.2%

11.3%

75.2%

2007

31.3%

16.7%

16.3%

11.2%

75.5%

2008

31.1%

17.0%

16.2%

11.4%

75.7%

2009

30.7%

17.0%

16.3%

11.6%

75.6%

2010

30.6%

16.9%

16.6%

12.0%

76.1%

2011

30.4%

17.1%

16.3%

12.0%

75.8%

From this table it is apparent that Tesco dominates the market, with Morrison's in forth place. All firms have seen fluctuations in market share with increases and decreases in the market share; however it is the financial performance which the investors may feel is most important.

The annual sales for each firm have all seen an increase over the last ten years when looking at the figures from the annual accounts. Tesco and WalMart, the parent firm of Asda, had a consistent increases year on year, Morrison's had only one year with a dip in 2003/4. The difficulties seen with market share for Sainsbury are apparent in the financial results, with a significant drop in 2004/5 with a slow recovery and the firm.....

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