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The two important determinants of consumers’ supermarket choice in food and drink industry
Recently, I read a book written by (Koch & Gough, 2009) and one chapter is about how to pick good business to invest. The book states a good company should have stable growth and steady cash flow, while at same time, profitable and less risky. Thus I use google finance to find such type of companies. And obtained a whole list of qualified firms. In the list, there is one company that I understand the most and do business with which is the J-Sainsbury.
I wrote this report is because I would like to understand more about the UK supermarket industry than their annual reports, and what are the main determinants of their business? Is price more important or is the location more important?
After my research, it seems that both value for money and convenience were important for majorities to make their grocery choices, but money is more concerned than convenience only if individuals buy large amount of food and drink in once, but this can be wasteful thus top-up shopping in convenience stores has becoming increasingly popular recently.
Table of Contents
1. Introduction 3
2. Consumer choice of supermarket 4
2.1 The background of UK retail business 4
2.1.1 Fall of real income leads to low consumer confidence 4
2.1.2 The consumptions in food and drink remain inelastic 5
2.2 The supermarket industry 6
2.2.1 Price and branding strategy in supermarket industry 7
2.2.2 Accessibility vs Price (Saving Time or Saving Money) 8
3. Conclusion 10
4. Recommendations 10
This report is aim to review some key determinants that affecting individuals’ supermarket choice. In particular, it helped to explain why supermarket was expanding their business by opening and acquiring local convenience stores recently. Furthermore, this report...