The supermarket industry in UK

The super mart effort in UKThe supermarket industry in UKIn UK, there are a huge amount of large supermarkets and state in British are usually go to these kinds of supermarket once a week, for example, Tesco, Sainsburys, ASDA. up to now though the supermarket industry in UK is not as well as the supermarket industry in America however, it is an important offset for people who living in British and a large part of supermarket is adopt the chain body structure to operate and it is all over the town. Therefore, the marketing mix of the UK supermarket industry can be shown as in four move. The expense in the UK supermarket industry see connection between each firms beca part the price rigidity. act to the place of the UK supermarket industry whitethorn build in suburbs or in the city which whitethorn clear for the consumer to choose and it have developed the usefulness which can shop on the internet. And the promotion of the UK supermarket, they may use some advertisement in the website and billboard. This essay forget be structured as four split which is the background of the supermarket in UK, the propertys of oligopoly, the advantages and disadvantages of the market structure for consumer and conclusion.Moreover, the supermarket in UK can be described as an oligopoly market so that the militant in the UK supermarket industry is very altitudinal. The characteristics of oligopoly can be divided into four parts which is non-price competition, price rigidity, L-shaped average cost curves and collusion. The structure of the oligopoly market is there is a small amount of dep stopent firms which compete with each other and it can be used barriers to entry to the industry. Furthermore, the oligopolistic firms may focus on the firms which relative to their industry to consider the supply. (Anderton A, 2004) The important characteristic is the clash between cooperate and self regard. The oligopoly company will produce less goods and gather the price whic h higher than the marginal cost. Thus, each sellers activity may have a great influence to the other firms profit. (Mankiw N, 2009) In addition, the supermarket industry in UK is sympathetic with the oligopoly structure. Firstly, oligopoly is rule by few large companies which mean collusion that plan the device and make profit together. Even though the UK supermarket industry is very competitive and beneficial however, there are four main firms in the industry which play an important part and the other firms will focus on the niche market to exist. The four firms are known as Tesco, ASDA, Sainsburys and Morrisons which are running grocery structure. The big four have become an oligopoly market structure that they have combined allot of 76% of the market at the end of 2008. (BBC news, 2010) This can be seen as barriers to entry to the other various smaller companies. According to the BBC news (2010), there are about 50 UK supermarket chains have defunct. Furthermore, the price be tween each firms have do a price rigidity which will retain a permanent level.The supermarket market structure in UK can be seen as oligopoly market and it have brought the benefits and disadvantages for consumer.Firstly, according to the Tutor2you (2007), non-price competition has play an important role in the sales of supermarket. Because of the highly competitive of the supermarket industry in UK, firms will increase market share and use tactics to sale promotion, such as store loyalty cards, banking and other financial service and extension of opening hours. (Source http//news.bbc.co.uk/2/hi/business/4694974.stm) This figure can be shown that Tesco was dominant in the supermarket share research. Moreover, BBC news (2006) list that Tescos market share remains rising and not only this supermarket still excessively other supermarkets have an upward tendency such as Sainsburys. It can be seen that the pace that Tesco have use is successful to assist the company. Besides, each fi rm will bring out there preferential measures and provide to the consumers which can allow them to choose and every measure may have their attraction.Secondly, oligopolistic firms are very superior in the market regularly and production capacity is generally larger which mean that the firms have ability to resist the risk and have advanced management technique. It is beneficial to consumers because it have allowance that consumers can buy with confidence. However, it also bring disadvantage for consumer in two ways. First of all, one of the characteristic of the oligopoly market is interdependence between each company which means one of the companies may consider the reception of the other firms in the marketing such as making price and some investment decisions. It may obtain the suitable profit that each oligopoly firms would satisfactory with it. Moreover, for the consumer, it may decrease the preference and the price will become indeterminacy because the price may fluctuate b y the oligopoly firms. The firms may combined together and mount the monopoly price which can acquire monopoly profits. (Tutor2U, 2007) Firms may also bull operation and it is far beyond the sincere value of the product. It is bad for consumer because it will und ermine the interest of its consumers. According to the Top retailing (2008), because of the rising price of fuel and food which allow people seek the cheaper price. All in all, based on the characteristic of the UK supermarket and the advantages and disadvantages of the market, the oligopoly structure should pay more attention to the measure which can give people the benefit fleck they can make the profit. The non-price competitions which can allow consumer seek a high quality and service among the similar price between each supermarket. Company should not in their own interest but also consider the consumer that it should have many considerations such as technical and geographical to improve and perfect the formation s uch as different discounts to the customers. Moreover, company can make a research to identify competitive suppliers, understand the information of supply market and efficient commodity strategy. 4. ReferenceAnderton A. (2004) Economics (3rded.) Ormskirk, Causeway infatuation Ltd. Assets date Feb, 4thBBC news (2006), BusinessEconomics (2009), UK supermarkets, oligopolistic competition Oligopoly watch (2003), British grocery oligopolyStructure of industry, the economic science of supermarkets Author Robert P.Asset date Feb, 4thTop retailing (2008), Grocery share Author name Nesbitt L.Tutor2U (2007), OligopolyAsset date Feb, 5th