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Impact of the Recession on the Three Supermarkets Tesco, Sainsbury and Morrison

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Abstract

This research paper analyzes impact of the recession on the three supermarkets Tesco, Sainsbury and Morrison. The research problems identified in this report are applicable to comprehending the overall effect between the economy and the supermarkets. It involves the impact of recession on the client loyalty to particular shopping warehouse, the impact of the selected strategies in the period of downturn on the retailers’ profitability and market share, and the blow of recession on the UK grocery sector as a whole. The research involves in-depth analysis of a questionnaire, 5-year annual reports, newspaper clippings as well as academic journals. The paper has substantiated its results with ratio analysis for the last five years. It has been vastly investigated to authenticate the conclusion and the recommendations.

The first phase involves the identification and extensive research into the problem followed a literature review to develop strong basis for further insights.  The second phase entails the sophisticated analysis on the data collected through the primary and secondary research work. It involves the use of pictorials to assist in better understanding of the research work. As a result, the analysis showed that the UK grocery sector had been adversely impacted as a whole; however, despite an economic downturn and deteriorating macro conditions, the three retail giants-Tesco, Sainsbury and Morrison have had an insignificant impact on their profitability, market share and loyalty of the customers. The research leads us to conclude that the leaders were able to combat the economic recession with an iron hand; and to revive their ways to the former glory with a year of the collapse of the economy. The analyses in the research also lead us to establish the fact that Tesco was able to maintain its dominance over the UK retail sector in terms of market share, sales, profitability and growth.

Impact of the Recession on the Three Supermarkets Tesco, Sainsbury and Morrison

Chapter 4

Fieldwork and​​ Data​​ Collection

  • Introduction

In this chapter, the methodology used is analyzed and discussed further and it importance to the three goals. The methodology is believed to be most significant part of the​​ research. The methodology section is quite essential for the research since it gives clear direction of what is expected and proper means of attaining desired results.​​ The clear-cut strategies and directions put in place will assist to increase the steadiness as well as put forward the job that can be​​ done elsewhere. This chapter​​ will provide​​ and explain​​ details of all the​​ models,​​ theories,​​ and structures​​ as well as tools used for data​​ gathering​​ and analysis.

Types of​​ Questionnaire

The chart flow gives the chronological approach that is to be taken during the research and gives appropriate methods​​ applicable. The​​ research has used a self-administered questionnaire with all three sub-procedures have been used. The questionnaire was sent to all the different places in order to have representative view of the population. However, a random sampling procedure was followed to eliminate any sort of biasness towards any population or a retail store. The response rate on the questionnaire was more​​ accurate​​ since​​ questionnaires are​​ simple and user friendly​​ thus do not take much of the times. A precise follow-up was on the chosen sample for quick and positive replies. Similarly, the data for financial analysis was collected from the company websites as well as Reuters and Bloomberg. Likewise, a lot of newspaper​​ clippings were collected to better analyze the market and make an unbiased opinion on the research questions.

  • ​​ Objective 1

Whether consumer’s loyalty of Tesco, Sainsbury’s and Morrison’s has been adversely affected by the recession?

    • Methodology

Survey and relevant research

    • Tool Used

A questionnaire has been prepared and other relevant information will be obtained from different sources like journals, newspapers and articles.

    • Rationale of Questionnaire and Other Sources Used

The research method that has been used in this study in order to achieve the above mentioned objective is a questionnaire (Appendix – 1). The questionnaire consists of 15 questions that are predominantly closed-ended in nature and it has been prepared for the participants who have the willingness to participate in the same. The main focus of preparing the questions mentioned in the questionnaire was to address the issue of prevailing economic scenario and how it has affected the people. In other words, the questions​​ are​​ constructed to measure the​​ effect of and related adjustments to​​ research project. Closed-ended questions were preferred over open-ended questions because the questions could be easily categorised and is quantifiable.​​ Moreover, closed-ended questions can be analysed easily. A particular value can be assigned to each of the responses in the questionnaire and can be easily interpreted using statistical methods. Hence, they are advantageous for computer analysis and can be helpful in providing conclusive evidence to the assertion or rejection of the hypothesis of the ongoing study.​​ The responses of closed-ended questions are more reliable and the turnaround time is less. It implies participants have to devote less time while answering the questionnaire and there is less chance of false replies being recorded (Seibert, 2002).​​ 

The main objective of this questionnaire is to identify the responses of the questions based on this study. This would help in achieving the objectives of this study too. Hence, the main focus of the questionnaire is to find the impact of the present economic scenario on how people are spending their money, particularly in groceries. Whether people have changed from where they used to shop before and have shifted to discounted stores because of the recession or have they remained loyal to large supermarkets and the reasons behind such changes, are all addressed in the questionnaire. Hence, the questionnaire used as a tool in this study was quite effective in collecting data in quick​​ time. It was also cost effective and large volume of data was gathered quite efficiently.

A random sample selection procedure was used to design the sample and in total 150 responses was collected from people in the nearby local supermarket. 50 questionnaires each were distributed to Sainsbury, Tesco and Morrison shopkeepers respectively. Since the questions were closed-ended, people were comfortable answering the questionnaire. Moreover data collection was over in quick time because customers did not have to ponder over or think much before giving their reply to the questionnaire.

Some of the questions in the questionnaire that has been prepared are mentioned below. Proper justifications and the reasons behind asking such questions have also been explained.

Question 1: Before the economic recession were you a regular customer of:

  • Tesco’s​​ 

  • Sainsbury’s  ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​ 

  • Morrison’s  ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​ ​​​​ 

Other ​​ 

This question was asked to find the loyalty of the respondent to a particular retail store before the recession. I provided the options of only three markets because they were the focus of my study and analysis.

Question 2: If you were a regular customer of one of the supermarkets mentioned what did you like about the one of which you were a regular customer?​​ 

It was local (i.e. convenient)

‘Bargains’ offered​​ 

  • The variety of its products

  • The quality of its products​​ 

Other

This question was put in the questionnaire to identify the reason behind the earlier loyalty of the respondent to a particular retail store. This will allow us to identify if the people had been price conscious in the past as well.

Question 3: Did the recession change your shopping behaviour?

  • Yes​​ 

  • No​​ 

This question was included in the questionnaire to identify if the respondents have been affected by the recession. This was the important question as it was the basis of my entire research. ​​ Therefore, simple yes or no options were provided to better analyze the results.​​ 

Question 4: Over the last 5 years how has your shopping behaviour changed?

This question was asked to further elaborate on the changing behaviour of the respondent to the recessionary period; and provide essential material for analysis. In order to extract as much as information as much possible efficiently, I provided the respondents with six opinion-based close ended statements where the respondent was asked to provide his level of agreement or disagreement with it. The​​ options of​​ strongly agree, agree,​​ does not know,​​ disagree and strongly​​ disagree-​​ approved​​ him to qualitatively express his feelings towards the opined statements.  ​​ ​​​​ 

I-I​​ Pay More Attention​​ to Prices Now

I asked this statement to find out the respondents’ behaviour towards the prices in the recessionary period as compared to their past behaviour.

II-The​​ Recession Has Affected My Customer Loyalty

I asked this question to see if the loyalty of the respondents’ has been affected by the recession. This will form the basis of the analysis of the Objective 1.

III-​​ I​​ Buy Food​​ on Special Offers (E.G. 2 For 1) More Often

Again, this statement will allow reinforcing the first statement as well as identifying the respondents’ behaviour towards the prices in the recessionary period.

IV-​​ I​​ Now Buy Similar Products​​ from Discount Stores (Such​​ as​​ Aldi,​​ Lidl,​​ Neto)

I included this to reinforce statement II above which will reflect on the loyalty of the respondent and his price consciousness. It will also help to identify his changing behaviour.

​​ V-​​ I​​ Now Compare Prices Charged​​ by The Different Supermarkets

This statement was again included to reinforce the changing behaviour of the​​ respondents​​ towards the prices.

Vi-I Now Purchase More ‘Own’ Budget Brands (E.G. Tesco Brands, Sainsbury’s Basics)

I included this statement to analyse the changing behaviour towards the budget brands during the recession. This will help me analyze the loyalty of the people towards brands and prices.

Question 5: In your opinion which of the three following supermarkets is the cheapest?​​ 

  • Tesco  ​​​​ 

  • Sainsbury​​ 

  • Morrison’s

This question was included to identify the positioning of the three retail giants in the minds of the respondents. I provided only the three retail outlets because they are pivotal to my research; therefore, this will allow me to analyze loyalty and price consciousness from the answers.

Question 6: Has the quality of the products you buy declined over the years?​​ 

  • Yes​​ 

  • No

This question was asked to find the quality of the products in the times of falling prices. I wanted to find out if the same quality of product was being provided to the respondents at cheaper rates.  ​​​​ 

Question 7: Which loyalty cards do you have?

  • Tesco Club card

  • Sainsbury Nectar card​​ 

  • Morrison’s Miles card

  • I have all three the cards​​ 

  • I have none of the club cards

I included this question to identify the loyalty of the respondent to a particular retail or to all of the retails or to none. This was a useful question as this will help me to connect loyalty and sales together.

Therefore, all these questions in the questionnaire were included to analyse the loyalty of the respondents’ to the three retail giants-Tesco, Sainsbury and Morrison- during the recession. It was directed towards the analysis of the respondents’ changing behaviour during the bad times and to observe their attitude towards prices and bargains.

 ​​ ​​​​ Objective​​ 2

To identify the effects of the strategies and competition skills chosen by the companies on its profitability and market capitalisation​​ 

    • Methodology

The methodology​​ applied in​​ analysis of financial​​ declarations​​ of companies and annual report.

    • Tool Used

Accounting ratios and market share analysis

    • Rationale of Accounting Ratios​​ and market share

The accounting​​ ratios​​ will​​ assist​​ to analyze the impact of the strategies on the financial condition of the companies. The analysis will​​ assist​​ to​​ evaluate​​ the company against its past history, against​​ rivals​​ and against the industry​​ standards. Therefore, ratios analyses are pivotal to assessing the financial position of the company. Similarly, it will​​ aid​​ to assess the companies’ performance during the​​ recession​​ period in the light of changing strategies and competitive skills. Likewise, it will help to assess the profitability, the solvency, the efficiency and the debt levels of the company. On the other hand, the market share analysis will help​​ to​​ assess the​​ usefulness​​ of the competitive skills and strategies.​​ A fall in market share will tell us that the strategies have failed in the face of still competition from the peers and the economic crisis.

Various figures or data will be obtained from the financial reports of these three companies for last five years to calculate the accounting ratios related to profitability, liquidity and efficiency of the companies.​​ By calculating these ratios, it will enable us to know about the financial performances of these companies and about its trend in the last five years.

4.3.1 Profitability ratios

Calculations of the following profitability ratios would be calculated:

    • Gross Profit Margin (GPM)

This ratio gives a measure of the company’s profit on sales. It is always desirable to have a higher gross profit margin (Pinson, 2008, p.115).​​ 

GPM (%) = (Gross Profit/Total Sales) x 100

    • Net Profit Margin (NPM)

It is a measure of the profitability of a company which indicates about how efficient the company is in converting its revenue into net profit (Webster, 2004, p.76).

NPM (%) = (Net Profit/Total Sales) x 100

    • ROCE (Return​​ on Capital Employed)

ROCE gives an indication about the profitability of the company based on long-term investments made by the company (Khan &​​ Jain, 2006, p.6.21).

ROCE (%) = (Net Profit/Capital Employed) x 100

4.3.2 Liquidity Ratios

Calculations of the following liquidity ratios would be calculated:

  • Current Ratio (CR)

It is a liquidity ratio which indicates about the ability of the company to meet its short-term liabilities​​ (Maynard, 2013).

CR = Current Assets/Current Liabilities

  • Acid Test Ratio/Quick Ratio (QR)

It is another variant of the current ratio which does not include stocks as current assets (Carlberg, C. & Carlberg, C. G., 2002, p.169).

QR = (Current Assets – Inventory)/Current Liabilities

  • Gearing Ratio

This ratio indicates the proportion of long-term debt in the company’s total capitalisation (Barthwal, 2007, p.338).

Gearing Ratio (%) = (Long Term Liabilities/Capital Employed) x 100

4.3.3 Efficiency Ratio

Calculations of the following efficiency ratio would be calculated:

  • Asset Turnover Ratio

This ratio gives an indication about the efficiency of the firm to utilise its existing assets in order to generate sales from it (Kimmel, Weygandt & Kieso, 2011, p.466).

Asset Turnover Ratio = (Sales/Net Assets) x 100

  • Objective​​ 3

What has happened to the retail grocery trade over the last five years in particular to the large supermarket chains?

    • Methodology

Case Study of company​​ annual reports

    • Tool Used

The tools used here will be the companies’ annual reports and other research materials like articles, journals and reports. It will also utilise ratios from objective 2 and survey from objective 1 and analysis of KPI.

Performance​​ comparison forms​​ a part of tool applicable to analyze the three companies for the last five years as shown below.

    • Rationale of Annual Reports of Companies​​ and ratios, survey and KPI

The annual reports provide us with all the relevant information of the industry as well as in-depth review of the entire of the sectors. These analyses will then be supported by research material such as newspaper clippings, articles, Bloomberg and Reuters to analyse the impact of the economic conditions on the retail grocery trade. The ratios analysis will be utilized again to find the impact of the recession on the large retailers in the grocery trade especially the growth trend as compared to the UK growth rate, unemployment, and inflation and consumer confidence. Similarly, the survey results will help to reinforce the findings of the secondary research and help strengthen the findings and the conclusion. Similarly, key performance indicators need to be analyzed to find the​​ non-financial performance of the company during the bad times. KPIs help analyze the customer satisfaction, the consumer confidence as well as reduced carbon footprint.​​ 

  • Summary

The methodology that will be used to analyze the three objectives comprises a survey, financial and non-financial analyses, macro-environment investigation as well as KPI​​ analysis. There will be much emphasis on the collection of effective information that helps in providing objective information for the analysis on the research problems;​​ as wrong data gathering will lead to inaccurate findings or conclusion.​​ Therefore, the fieldwork and data collection​​ is critical​​ step in​​ this​​ research work. This will set the foundation for the further analysis on my work and help me set a strong basis for my findings and recommendations.

Chapter 5: Data Analysis

5.1​​ Data​​ Analysis:

In this chapter, data gathered is analyzed and appropriate tools for presentation is applied to represent data in a desirable manner. The readily available and easy to use for data presentation is the spreadsheet. I have chosen Microsoft-excel because it has capability and functions to​​ assist in data tabulation.​​ Excel has graphs, charts functionalities which allows for data tabulations.​​ The data​​ techniques​​ that will be involved are: pie charts, line graphs and bar charts which will illustrate the data collected and assist in drawing conclusions. With the aid of excel, the researcher managed to conduct ratio analysis including: liquidity ratios, profitability ratios, efficiency ratios and solvency ratios - ​​ and all the ratios are represented by graph to better see what these ratios represent.​​ 

Objective 1: The first question of this research study is to whether consumer’s loyalty of Tesco, Sainsbury’s and Morrison’s has been adversely affected by the recession?

​​ The closed ended questionnaire survey was conducted on 150 respondents. ​​ The pie chart below represent percentage of those who agreed that recession affected them and those who said was not affected. Yes indicate affected participants yet No, represents not affected.​​ Slightly over three quarters respondents were affected,​​ approximately​​ 78%​​ and 22% answered that were not affected.

The next data representation shows​​ the loyalty of each respondent to a retail store in the UK before the economic recession hit the country’s market. The histogram depicted in clearly shows that 148 respondents went to the top three retail stores-Tesco, Sainsbury and Morrison. The same figure also shows highest number of the respondents went to Tesco for their shopping. Only of 2 of the respondents from the total sample chose the ‘other’ option, clearly implying that a majority of the​​ respondents’ ways of spending were not affected by recession.​​ ​​ No: not affected; Yes: affected

Chart below allowed me to​​ made a data representation and​​ identify the particular reason as to why each respondent associated itself with a particular retail outlet. The two most common reasons identified were that the store was local and that it provided high quality of products. 65% of the respondents associated themselves with these two reasons. However, the remaining 35% of the respondents pointed that the bargains and the variety of the products offered at the store as the​​ reasons behind their loyalty to a particular store. Looking at it individually, convenience was still the most sought option of the people.​​ 

Figure below​​ allowed me to​​ represent data collected and​​ identify if the recessionary period had impacted the shopping behaviour of the sample of the citizens of UK. ​​ With regard to my topic, this is the most relevant question. The diagram clearly shows that 129 respondents (86%) of the total sample​​ agreed​​ that their shopping behaviour has been impacted by the recession. With the recession, the budgeted income of the household had dramatically decreased while the prices of the commodities had increased over the same period of time​​ (Birtwistle, Bruce & Moore, 2004).. This had impacted the behaviours of the people around the world especially in the UK. However, only 21 respondents (14%) stated that the recession had no impact on their shopping behaviour. Therefore, we can say that the shopping behaviour of the majority of the respondents was affected by the recession.​​ 

Figures below​​ allowed looking into the way the shopping behaviour had changed after the recession. There are six statements with which the respondent had to agree or disagree to an extent. This identified the specific places where the respondents were spending their money. 122 respondents (81%) of the sample either agreed or strongly agreed to the fact that they were now purchasing more ‘own’ brands as compared to external brands due to lower prices and higher bargain offers.

97 respondents (65%) of the sample either agreed or strongly agreed to the fact that they now compared prices charged by the different stores in order to find the best bargain in the recessionary period.​​ 

101 respondents (67%) of the sample either agreed or strongly agreed to the fact that they now bought similar products from the retail stores around UK.

​​ 123 respondents (82%) of the sample either agreed or strongly opined that they bought food on special offers. The fifth and sixth statements are particularly important to my topic of research. The fifth statement was to assess the loyalty of a respondent to a retail store.​​ 

110 respondents (73%) either agreed or strongly agreed to the fact that the recession has affected their loyalty to a retail store as they looked for better bargains and prices offered by the stores.​​ 

This analysis is further supported by sixth statement in which 129 respondents (86%) opined that they pay particular attention to the prices after the recessionary period. 18 of the respondents disagreed and opined that they paid no attention to the prices. These appear to be the same respondents who earlier stated that the recession had no impact on them and their shopping behaviours. Therefore, the shopping behaviour of majority of the respondents has been affected in a variety of ways with more focus on prices, special offers, bargains and own brands.​​ 

Figure below​​ shows the loyalties of the sample to a particular retail store. Club cards depict this loyalty of a person. It clearly shows that a majority of the respondents-60 in all- stated that they had Tesco Club card followed by 48 respondents claiming that they owned a Sainsbury Nectar card. ​​ However, 10 of the respondents stated that they owned no club card. Therefore, we can see that 140 respondents (93%) of the sample owned a club card of some sort in this recessionary period. Everyone has trying to take advantage of the cards to decrease the overall spending on the groceries and shopping.​​ 

5.2 Accounting Ratio Calculations and Analysis

Objective 2: ​​ the second objective of the study is the impact of their chosen strategies, competition skills on profitability and market share.​​ 

We are going to look at different ratio’s of the supermarkets to enable to analyse to what extend it has on their profitability and market share. I will be using excel to help show the ratio’s stabilisation over the last five years and the market share.​​ 

These are the following ratio’s that will be calculated, analysed and discussed:

Profitability ratios

  • Gross profit margin (GPM)

GPM (%) = (Gross Profit/Total Sales) x 100

Tesco

Year

Gross Profit Margin

2009

4218/54327*100 =​​ 7.76%

2010

4607/56910 *100 =​​ 8.10%

2011

5060/60931*100 =​​ 8.30%

 

Morrison’s

Year

Gross Profit Margin

2009

818/12969*100=6.30%

2010

1062/15410*100= 6.89%

2011

1148/16489 * 100 = 6.96%

Sainsbury’s

Year

Gross Profit Margin

2009

 

2010

1082/19964*100= 5.42%

2011

1160/21102*100=​​ 5.50%

 

  • Net profit margin

NPM (%) = (Net Profit/Total Sales) x 100

Tesco

Year

Net profit margin

2009

2954/54327*100 =5.44%

2010

2336/56910 *100 =​​ 4.10%

2011

2671/60931*100 =​​ 4.38%

 

Morrison’s

Year

Net profit margin

2009

612/12969*100=4.72%

2010

598/15410 * 100 =​​ 3.88%

2011

632/16479*100 =​​ 3.84%

 

Sainsbury

Year

Net profit margin

2009

 

2010

585/19964*100=​​ 2.93%

2011

640/21102*100=​​ 3.03%

 

  • Return on capital employed (ROCE)

ROCE (%) = (Net Profit/Capital Employed) x 100

Capital employed =​​ Total Assets-current liabilities

Tesco

Year

Return on capital employed (ROCE)

2009

=10.55%

2010

2336/30001​​ *100 =​​ 7.79%

2011

2671/29475*100 =​​ 9.06%

 

Morrison

Year

Return on capital employed (ROCE)

2009

612/6022*100 = 10.16%

2010

598/6608 *100 = 9.05%

2011

632/7063*100 = 8.95%

 

Sainsbury

Year

Return on capital employed (ROCE)

2009

 

2010

585/8062*100= 7.26%

2011

640/8457*100= 7.56%

 

Liquidity​​ Ratios

  • Current ratio’s

CR = Current Assets/Current Liabilities

Tesco

Year

Current ratio

2009

11124/15891= 0.7

2010

11392/16015=0.71

2011

11438/17731=0.65

 

Morrison’s

Year

Current ratio

2009

1065/2024=0.53

2010

1092/2152=0.51

2011

1138/2086=0.55

Sainsbury’s

Year

Current ratio

2009

 

2010

1779/2793=0.64

2011

1708/2942=0.58

 

  • Acid test ratio’s/ Quick ratio

QR = (Current Assets – Inventory)/Current Liabilities

Tesco

Year

Quick Ratio

2009

 

2010

(11392-2729)/16015=0.54

2011

(11896-3162)/17731 =0.49

 

Morrison’s

Year

Quick Ratio

2009

(1065-494)/2024=0.28

2010

(1092-577)/2152= 0.24

2011

(1138-648)/2086= 0.23

Sainsbury’s

Year

Quick Ratio

2009

 

2010

(1797-702)/2793=0.39

2011

(1708-812)/2942=0.30

 

  • Gearing​​ Ratio

Gearing Ratio (%) = (Long Term Liabilities/Capital Employed) x 100

Tesco

Year

Gearing Ratio

2009

=149.14%

2010

15327/30001 *100 =​​ 51%

2011

12852/29475*100 =​​ 43.6%

Morrison’s

Year

Gearing Ratio

2009

1682/6022*100 =​​ 27.9%

2010

1659/6608 *100 =​​ 25.1%

2011

1643/7063*100 =​​ 23.3%

Sainsbury’s

Year

Gearing Ratio

2009

 

2010

3096/8062*100= 38.4%

2011

3033/8457*100= 35.86%

 

Efficiency Ratio

  • Asset turnover ratio

Asset Turnover Ratio = (Sales/Net Assets) x 100

Tesco

Year

Asset Turnover Ratio

2009

54327/*100 =5.44%

2010

56910/14681​​ *100 =​​ 387.6%

2011

60931/16623*100 =​​ 366.55%

 

Morrison’s

Year

Asset Turnover Ratio

2009

12969/4520*100=286.92%

2010

15410/4949​​ * 100 =​​ 311.38%

2011

16479/5420*100 =​​ 304.04%

 

Sainsbury

Year

Asset Turnover Ratio

2009

 

2010

19964/4966*100= 402.01%

2011

21102/5424*100= 389.04%

 

Analysis on Profitability Ratios

The profitability​​ ratio quantifies​​ the​​ capability​​ of the​​ corporation​​ to generate​​ revenues​​ while efficiently using the company’s​​ resources. This is an important indicator from the stakeholders’ point of view including shareholders, investors and creditors. These ratios are affected by sales, input cost and administrative and selling expenses.

Tesco has the best gross margin amongst the three retailer giants- Tesco, Sainsbury and Morrison as clearly shown in figure 5.2.1. Tesco’s margin remained stable during the initial recessionary period and then started to increase from 2009 showing an increase efficiency of the direct costs as well as an increase in the volume. Sainsbury’s margin has remained stable over the years from 2008 to 2012 despite the recession. Tesco contributed 8.2p to the gross profit for every £1 of sale that is made as compared to 6.9p by Sainsbury and 5.4p by Morrison. As compared to industry’s five year average gross profit of 33%, all three​​ retailers lag far behind and need to work upon controlling their manufacturing costs. (Reuters 2013)

The three giant retailers have increasing fluctuation in their net profit margins over the years from 2008 to 2012 as clearly seen in figure 5.2.2. The recession hit their net margins hard as all three show a downturn in net margin in 2009 as seen in the figure 5.2.2. This is when the people altered their shopping behaviours and became more prices conscious and​​ keen. Morrison was most affected by the recession as its net margin declined by 26% in 2009. It became to rise in the next year and has remained stable for the last three years. Tesco was the least affected by the recession as it has maintained its margins over the years despite the recessionary period​​ (SETH & RANDALL, 2011). Sainsbury took the most advantage as its net margin increased by 93% in 2010 and has then maintained it over the period. However, despite this jump, Sainsbury remains far behind Tesco and Morrison. ​​ As compared to industry’s five year average net profit of 2.86%, Tesco and Morrison are performing much better; this shows that the two​​ retailers have an improved control over their administrative and selling expenses. On the other hand, Morrison is almost at​​ equal level​​ with industry and need to improve its control over the expenses. ​​ (Reuters 2013)

Return on capital employed is the measure of efficiency of the usage of the capital resources of the company. It has to be higher than the interest rate in order to make the investment worthwhile. Tesco’s ROCE declined by 3.2% in 2009; but has been steadily increasing since then as seen in figure 5.2.3. Morrison and Sainsbury showed an increase in the same year and henceforth as well. Of the three giants, Morrison provides the best returns on the capital employed in 2012 as seen in figure 5.2.3. As compared to industry’s five year average ROCE of 6.78%, all three retailers have performed well. This shows the efficiency of the usage of the company’s investments. ​​ (Reuters 2013)

All three retailers-Tesco, Sainsbury and Morrison- have launched several campaigns to increase their sales through retaining clientele, encroaching upon competitors’ market as well as entering new markets. This will help them improve their profitability ratios to a great extent.

 

Analysis on Liquidity Ratios

The liquidity ratios​​ gauge​​ the ability of​​ an organization​​ to pay the short term obligations within the stipulated time. This measure represents a safety net for the creditors of the company. All three retailers are at par to the industry benchmarks. These ratios are affected​​ by amount of current assets and current liabilities including inventories, receivables and payables.​​ 

With a current ratio below benchmarks and industry averages, the company are in a weak potion to pay out their obligations in time. Nonetheless, Tesco has the best current ratio compared to the other two retailers as clearly seen in figure 5.2.4. In 2012, Tesco held 67p of current assets for every £1 of its current liabilities compared to 65p and 57p by Sainsbury and Morrison respectively. However, Tesco has improved its liquidity position over the five year period showing a strengthening position to counter the recessionary traumas. Sainsbury and Morrison have remained stable over the period and were least affected by the recessionary period. As compared to industry’s five year average current ratio of 0.95, all three retailers lag far behind and need to work improving their liquidity positions and cash conversion cycles. (Reuters 2013) All three retailers need to improve their position in the coming years to become more liquid.  ​​ ​​ ​​ ​​​​ 

This ratio is a much better indicator of the liquidity position of the companies. The retailers have weak acid ratios as compared to the market leaders and industry averages. As compared to industry’s five year average quick ratio of 0.77, all three retailers lag far behind and need to work upon improving their control over their inventories and​​ prepaid. (Reuters 2013) Further insights into the statements and analysis show that Morrison holds a large amount of its current assets in the form of inventory and pre-paid. Morrison had a weak quick ratio in 2008 which has further deteriorated in the last five years as seen in appended figure 5.2.5. Sainsbury’s position has fluctuated from 2008 to 2010 and then stabilized as seen in appended figure 5.2.5. Tesco jumped 24p in 2009 but then began to decline over the period. However, Tesco has improved its liquid position. In 2012, Tesco held 46p in quick assets for every £1 of its current liabilities as compared to 33p and 21 p by Sainsbury and Morrison. ​​ 

Analysis of Gearing Ratio

The gearing ratio, also known as asset to equity ratio, measures the leverage of the company. It determines the amount of financing brought into the company borrowed from different sources compared to the investment brought in by the owners of the company. As you can see in appended figure 5.2.6, Tesco is a highly leveraged retailer as compared to the other two retailers. The leveraged position took a jump in 2009, but has been falling since then. Sainsbury has a strong leverage position using effectively both the debt and equity sources. The position has remained stable over the five years as seen figure 5.2.6. Morrison has better stable gearing ratio; however, the company can effectively use​​ more debt resources and increase the overall revenues. In 2012, Tesco has raised £1.85 of debt for every £1 of equity as compared to £1.19 and 85p by Sainsbury and Morrison.​​ 

Analysis on Efficiency Ratio

This ratio identifies the generation of the revenue from the efficient usage of the assets. ​​ Tesco’s ratio decreased in 2009 by 39 points. However, this is not due to inefficient usage, but a 50% increase in the total assets of the company; nonetheless, Tesco has been unable to increase the ratio to the former glory which signifies the inefficiency and obsolesce of the assets. It lags far behind the other two retailers. Sainsbury and Morrison have improved their efficiency of the asset usage over the years as the appended figure 5.2.7 shows an increase in their ratios over the 5-period. In 2012, Sainsbury generated revenue of £1.81 for every £1 of the assets held by the company as compared to £1.79 and £1.27 by Morrison and Tesco.​​ As compared to industry’s five year average ROA of 4.17, Morrison and Sainsbury have a better usage of assets for generating revenue. However, Tesco lags being the industry benchmarks and need to work upon its efficiency and better asset usage. (Reuters 2013)

Analysis on Market Share

UK​​ Grocery​​ Market​​ Share

In the UK retail sector, the market position of major supermarkets

The retail industry in the United Kingdom is a frequent source of data answer questions.

According to the 2012 research by world panel, Tesco share has declined over the years by 0.5% where Sainsbury continues to increase its market share.​​ 

Therefore, the loyalty club cards and price matching schemes have brought UK retail sector into a stiff competition. Each retailer tried its​​ best its increase its market share with its strategies and discount offers to encroach upon the others’ clientele through discounts, price reductions and brand match. Similarly, every retailer is trying it level best to retain its loyal customers through club cards and discounts on consecutive visits​​ (GREAT BRITAIN, 2005).

Objective 3:​​ What has happened to the retail grocery trade over the last five years in particular to the large supermarket chains?

The UK economy has been in a bad shape since the recession that hit the global world in early 2008. The growth rates fell, the investment dipped, the unemployment rose and the consumer confidence was shaken. The economy was in dithers and had hampered almost every form of business including the retail groceries stores. ​​ The most important factors of the economy that have influenced supermarkets over the last five years are: Unemployment rate, consumer confidence, consumer expenditure on food, UK economy growth, raw material suppliers, consumer loyalty and UK house hold income and expenditure

The inflation rate peaked in late 2008 but​​ fell back to minimum in the following year as seen in figure 5.3.1. However, the economy could not sustain itself and the price kept rising gradually from 2010 to 2012. The inflation of the consumer goods and groceries has made the ordinary customers’ price conscious and choosy in their products. This, in turn,​​ has made the supermarkets moving towards discounts bundles, bargains and price drops.​​ 

The unemployment rate has been fluctuating between 7.8 to 8.1% of the labour force between 2009 and 2011 as seen in figure 5.3.2. However, since late 2011, the unemployment has been on rise and peaked at 8.4% in January 2012. Unemployment decreases the demand of the overall products- and people are forced to look forward to low prices and bargain options. This has been supported the research question which showed that a majority of the people have become price conscious.

Consumer​​ poise​​ has been pretty low since 2004 and has been decreasing since then as seen in figure 5.3.3. It peaked low in early 2008 when the effects of recession have touched every person in the world. Nonetheless, the confidence has been unable to grow back because people are afraid of another recessionary period and have little in the government policies. Looking to the European Union position, this confidence will take time to restore to the former glory.​​ 

The GDP growth took a nose dive in the third quarter of 2008 when the recession hit the global world as seen in figure 5.3.4. The recovery to the former heights has been slow and steady; however, the progress is there and the UK economy will soon revive and restore the​​ consumer confidence. ​​ The growth has directly reduced the investments and incomes; which has hampered the growth of the retail sector.

However, despite this recessionary impact on the economy, the​​ retail sales volume has shown a positive growth as seen in appended figure 5.3.5 despite the recession and weaknesses in the UK economy.​​ ​​ The revenues of the three retailers-Tesco, Sainsbury and Morrison- have been growing but at a steady rate during the recession. Tesco saw the greatest increase in revenue amongst the three competitors as it revenue increased by 36% from 2008 to 2012 followed by Sainsbury with an increase of 26% in the revenues in the same period.​​ The non-food expenditure growth has been stronger as compared to food expenditure due to the lowering of prices by the retail stores. (McLaren, 2009)​​ The alcoholic consumption has remained constant over the period showing the least increase as seen in appended figure 5.3.7.​​ 

The pie chart, appended 5.3.6, clearly shows that a major chuck of the sales in 2012 was made by the hyper markets and super-stores followed by small super markets and convenience stores. The discounters still account for a very piece of the overall sales. This shows that the large retails were still the overall beneficiaries of the sales in 2012. (IGD 2013)

The three giant retailers’, despite the economic woes, maintained their market share as well as profitability in the last five years. The retailers’ revenues continue to increase;​​ however,​​ in a decreasing growth rate. It is strongly believed that the retail sector will again take off and become one the fastest growing sectors of the United Kingdom. This will be further elaborated in chapter 6.​​ 

Chapter 6: Discussion

The objective one result showed us that recession has changed the shopping behaviours of the UK consumers. Initially, they moved towards the discounters for better offers and lower prices to save on the decreased disposable income. However, the retailers were able to maintain their client through various campaigns and schemes. ​​ According to the market researchers, about 85% of​​ families in the UK have a minimum of​​ one loyalty​​ card,​​ TNS.1​​ Tesco leads club card membership in UK with 15 million​​ vigorous​​ members who received a​​ sum​​ of £529million in vouchers. On the other​​ hand,​​ Sainsbury has launched its Nectar card which has 10.8 million active customers. Similarly, a considerate amount of store​​ has​​ launched similar loyalty schemes to attract more customers to their stores. A survey states that 80% of the supermarkets profit comes from 20% of its clientele.​​ Therefore, through this loyalty card, the retailers keep a track of the demand of their active customers and furnish their demands in the most favoured way. (BBC 2012) It increases to such an extent that people prefer to opt stores where they can earn more rewards. Likewise, our research also showed us that 93% of the sample respondents own a loyalty card to Tesco, Morrison or Sainsbury. According to the results of the questionnaire survey, the discount stores are becoming threat to the large retailers. Consumers have become price conscious and opt for discounts and promotions. Ed Garner, communications director at Kantar Worldpanel, said that at the start of recessionary period, people flocked towards the discount stores. Aldi’s sales were up by 26% while those of large retailers were in a downward trend. However, fast forward to 2009, consumers moved towards retail ‘own’ brands which offered a greater quality for lesser price as compared to the expensive brands. Waitrose and Tesco Finest were two of the fastest growing own brands proceeding the initial recessionary shocks. (Global Convenience Store Focus 2010) Sainsbury is perceived as more expensive by the consumers. "Broadly speaking, customers think we're more expensive than we are - typically 5% to 10% more than our competitors2.” ​​ (Webb 2011) This view is also supported by our questionnaire results. Only 23% of the sample respondents perceive it as the cheapest option as compared to Tesco and​​ Morrison. Sainsbury launched a Brand Match scheme to renew their perceptions. The scheme marketed the fact that the consumers will earn cash voucher equivalent to the difference in specific brand prices at Sainsbury and other large retailers. This attracted a lot of cash strapped consumers to Sainsbury and helped revive profits. On the other hand, Tesco launched a similar scheme-Price Promise- on similar basics to match the success of Sainsbury. At the same time, Morrison launched its Easter Payback Bonus which allowed to consumers to avail a big discount after a few consecutive sales. (King 2013) Therefore, in this recessionary cum competitive environment, every retailer including Tesco, Sainsbury and Morrison is working to attract more consumers by providing discounts, bonuses, cash vouchers and reduced bills on consecutive bills​​ (HENSMANS, JOHNSON& YIP, 2013). ​​​​ 

The objective two results showed us that the effects of recession on the profitability of the three major retailers-Tesco, Sainsbury and Morrison were insignificant. Tesco group’s revenues grew 9% at average during the last five years. It showed only a modest growth of 1.6% in 2012 as compared to 12.3% in 2011 and 8.7% in 2010. The company was hit hard by the Hungary tax crisis and the increase in provisions at the banks. Likewise, the retail revenue showed slight growth in the last five years despite the fact that they have lowered the prices of 3000 commodities in the ‘The Big Drop’ strategy in 2011. The retails showed​​ 0% growth in the UK operations 2012. The strategy has moved towards “Focus on 2012/13”. However, Tesco was highly beyond expectations in the customer experience. 76% of the shoppers found their experience good or excellent. Tesco has also improved on its international retail operations over the last five years-18% growth in 2012 as well as shown an increasing customer satisfaction with every passing year-more than 95% customers with good or excellent shopping trips. ​​ This customer satisfaction has translated into brand loyalty to Tesco. They lead in 4 markets and are placed second in 5 markets. This is supported by our research work as well. Similarly, Tesco’s own brands has seen an increase as is supported by our research that the customers are moving towards own brands. (Tesco Annual Report 2012)

Sainsbury has shown an improved financial performance over the five years with increased sales, operating margins and profits. Similarly, the return to the investors has been showing a positive increment trend. The basic EPS has grown from 17.4 in 2007/08 to 28.1 in 2011/12; whereas the DPS has increased from 12.0 in 2007/08 to 16.1 in 2011/12. ​​ The Company has worked immensely on improving the brand picture through the reduction of the carbon footprint, service to the community and customer services. For instance: Sainsbury has saved 48,000 tonnes of carbon​​ accumulated since 2007​​ with the help of​​ Farm Development Groups (J Sainsbury Annual Report 2012) Another scheme launched by​​ Sainsbury to help them position as a cheap store compared to market leaders is the providing a money-off coupon Brand Match scheme. The consumers get a coupon if there is a difference between their prices compared to other retailers on a specific brand. This has helped Sainsbury to record increasing sales over the five years from 2007 to 2012. (Sainsbury Annual Report 2012) Following this scheme, Sainsbury recorded more than £100 million in sales on Christmas Eve in a record breaking festival night. Similarly, it is one the four large retailers to increase its​​ market share from 17% to 17.1%​​ (Williams 2013).​​ Justin King,​​ chief executive of Sainsbury's​​ said,​​ “The​​ group delivered good sales growth in "challenging" conditions3”.

Morrison saw increasing like-for-like sales with a strong growth in the South of England. It has trying hard to strengthen its own brands across the retail world. Despite the aggressive strategies followed by Tesco and other competitors, Morrison has been able to maintain its market share around 12.6% over the last few years. In their continued commitment to reduce carbon footprint on the global world, there was a positive move; however, there is a downward trend showing up due to the demanding and competitive situation. Moreover, they plan to reduce landfill waste to zero by 2013. (Morrison Annual Report 2012) However, Morrison has failed to perform well in the last five years. Despite​​ increasing revenues in several corner of the country, it lost its market share in 2012-slipping back to 12%.​​ ​​ “Morrisons is​​ structurally disadvantaged​​ by its lack of grocery delivery service and small number of convenience stores4, Seymour Pierce retail expert Kate Calvert suggested.

The ‘Big Four’ – Tesco, Asda, Sainsbury, Morrison and account for 76.2% of the UK grocery market in the country and saw a steady growth over the recessionary period with their discount strategies; whereas the planet retail which accounted for 23.8% of the UK grocery market was adversely affected with the recession. These giants took over the share of the planet retail with their increasing product ranges, services and loyalty cards. (Market Analysis Report, 2009)​​  ​​ ​​​​ 

The objective three results show us that the UK grocery market did increase in size despite the recessionary period. However, the growth of the market has been drastically reduced during the last five years due to the severe economic conditions- unemployment and inflation are on a rise, consumer confidence is low, disposable income is decreasing and the input prices are increasing​​ (HART, 2003). Despite this fact, the​​ overall size of the UK grocery market has been increasing since 2002 as clearly shown by the appended graph 6.1.1. Currently, it stands at a valuation of £163.2 billion. However, the growth rate of the market has​​ started to fall since 2009 when the recession hit the UK markets. It fell from 4.9% in 2009 to 3.3% in 2011. Nevertheless, the economy is on a recovery and so is the growth rate of the grocery market. (IGD 2013) Similarly, the capital expenditure was as per the plans to increase their presence.​​ Sainsbury increased it stores from 823 in 2008 to 1012 in 2012; an increase of 23% over the five years. This did not affect the sales volume as the sales per square foot remained approximately same over the years. ​​ However, this has increased the visibility of the store and will help in the coming years. (Sainsbury Annual Report 2013) Morrison increased it stores from 375 in 2008 to 475 in 2012; an increase of 26% over the five years. This increased the visibility as well as the average takes per customer-increased from £23.10 to £24.62. (Morrison Annual Report 2013)​​ Tesco showed an increment in the number of stores- from3751 in 2008 to 6234 in 2012- an increment of 66%. Through this, Tesco has its position in the market as a leader and increased it sales revenue immensely during the five years compared to other stores. ​​ (Tesco Annual Report 2013)

Chapter 7: Conclusion and Recommendations

Conclusion

The evidence collected over the course of study through primary and secondary research establishes the fact that the recession has adversely affected the retail sector in the United Kingdom; nonetheless Tesco, Sainsbury and Morrison were least impacted by the recession.​​ 

It has been clearly identified that the UK economy was unfavourably disposed by the global recession that hit the UK market in late 2008 and early 2009. The recession​​ forced the growth rate to fall, the investment to dip downward, the unemployment to rise and the consumer confidence to shatter. The economy was in dithers and had hampered almost every form of business including the retail groceries stores​​ (Schnedlitz, 2010).

The first question of this research study was apparent that the loyalty of the million of the customers had changed towards discount stores and retails markets with better bargains and lower prices. The recession impacted the household income which affected the shopping behaviour of millions of people across the country. This is supported by our primary research which showed that 86% of the respondents had their behaviours changed by the recession. ​​ Similarly, people have​​ become more price conscious and are prone to move toward better bargains. Therefore, the loyalty of the customers had been questioned.

Nonetheless, Tesco, Sainsbury and Morrison were in themselves considered cheap retails stores; therefore, the impact was minimal. The primary research showed us that a majority of the customers considered Tesco and Morrison as the cheapest stores in the UK. Similarly, it also supported that millions of the customer owned loyalty cards to either of three retail stores. Therefore, the loyalty of the customer had been shaken; but the three stores maintained certain amongst the customers with strategic discount moves and positioning​​ (NIZAR, 2010). ​​ ​​ ​​ ​​​​ 

The research and analysis of the company accounts, policies and strategies show us that the impact of their chosen strategies, competition skills on profitability and market share was insignificant. All three retailers had maintained their market shares, profitability and better position in the minds of the consumers. Their strategies to off- set the prices, loyalty schemes, focus on sustainable production and improved services paid off in the form of sustained revenue for the company​​ (AGNIHOTRI &​​ RAPP, 2010).

Overall, this is supported by the secondary research on the company annual reports and KPIs. The revenues of the three retails have been increasing at a steady rate from 2008 to 2012 with Tesco leading​​ the growth rate and the quality of income.​​ The impact of recession on the three giant retailers of the UK was insignificant throughout the period of 2008 to 2009, except for marginal decline in the net profit margins in FY2009. This decline can be attributed to the increase in operating expenses only, as gross profit margins remained stable for these companies. Moreover, the strict procedures of these ensured the growing trend in the absolute amount of the gross profits and thus providing a room for increase in operating expenses on the pretext of the recessionary pressures of FY2009. Post FY2009, these retailers have shown growth in their net profit margins since FY2008, while gross profit margins remained stable. Furthermore, the average of the return on capital employed have remained stable, however there were apparent variations among the market players. As the ROCE of TESCO declined from FY2008 to FY2009, the trend for the Sainsbury was positive as the ROCE showed increment, while Morrison showed a trend that was stable and less volatile. It was also found among the players, TESCO and Morrison’s posted better gross profit margins than that of Sainsbury, such trend can also be found in the case of net profit margins​​ (Dinkhoff, 2009).

As far as the liquidity is concerned, the nature of the business promotes large amount of stocks and small amount of cash is kept within the business for the purpose of conducting transactions only. As the bulk​​ of the cash is invested in the repurchase of the inventory, more inventories is sorted out on the credit, owing to the large number of the sales of these giants that serves in their favor to pay way later than an average retailer for the purchases they made​​ (Brumfitt, 2001).​​ Thus,​​ the overall liquidity of the three may seem low but it is quite healthy as far retail sector is concerned. In relation to time, the industry’s current ratio has increased since FY2008, while the acid-test ratio has declined for the same period, this only confirms to the fact that the inventories are being piled up more in relation to other current assets. Moreover, the increase in the stock can be attributed to the increasing sales as can be seen by the relation of the respective inventory turnover ratio that kept the same trend as that of current ratio throughout the period of FY2008 to FY2009. Despite the fact that Sainsbury’s net profit margins are significantly lower than its competitors, yet it has been efficient in conducting its operations as can be seen by the relatively high asset-turnover ratio​​ (Obitz, 2009). However, the ratio is significantly lower than any average retailer, such can be attributed to the fact that the​​ large-scale​​ retailers have higher amount of capital invested in the fixed assets and thus they post lesser asset turnover as compared to an average retailer.

The leverage or gearing ratio of the three retailers is significantly above than any average retailer. This only confirms the revelation that​​ we made earlier that the giant size and sales share of these retailers allow them to dictate their credit terms thus maintaining high amount in the liabilities portion. On the other hand, the investment in the long term assets favors these to borrow long than short, thus increasing the overall leverage position of these where TESCO tops the list of the gearing ratio, followed by Sainsbury; whereas the stance of Morrison’s has been less riskier as compared to its major competitors​​ (Hensmans Johnson & Yip, 2013).​​ 

Coming down to the final, the economic crisis in the United Kingdom and worldwide​​ have adversely​​ influenced the retail grocery market especially the planet retail. However, the industry giants including Tesco, Sainsbury and Morrison have been least impacted by the same recessionary period. The secondary research allows us to conclude that the recessionary period drove down the UK grocery by 14% in the FY2009. Overall, the industry revenues took a dip as retails volumes decreased with customer becoming price conscious, prone to more bargains and spendthrift.

However, the secondary research again leads us to a conclusion that the giant retailers accounting for 55% of UK retail industry grew in their share and cutting off the smaller retailers. Through their price cutting, better services and loyalty schemes, the large supermarkets crept​​ upon the planet retail. The sheer trade volume allowed them to sustain their growth in this recessionary period.

Recommendations

The Government and giant retailers both need to play a pivotal role in the revival of the UK grocery market. Both need to focus their attention towards the revival of the economy, the consumer confidence as well as the quality of service.​​ 

Objective One

The retailers could earn more customer loyalty by investing more in service. ​​ It is a known phenomenon that consumers are likely to spend more if they find a worthwhile service. Likewise, the retailers need to link their rewards to the spending rather than consecutive visits. This will allow them to increase their revenue as well.​​ 

Objective Two

The retailers need to curtail their input costs in order to improve their gross margins. This can do by looking forward to better and consistent relations with the suppliers from around the world. They must look to better bargains and lower prices; thereby increasing the margins as compared to the industry benchmarks. Similarly, they need to work upon their cash conversion cycle to improve their liquidity position and​​ work on a better inventory management​​ system. On the other hand, a customized environment to the requirements of their loyal customers will earn them more reputation; and hence encroach upon the competitors’ market share.​​ The retailer’s – especially the leaders – need to focus their attention towards a better service, quality of products and providing the best bargains across the board. This will help to restore the confidence while still making a profit on regular basis.

Objective Three

The government need to focus its attention towards the revival of the economy increasing the public expenditure every quarter. Likewise, it needs to curb inflation and unemployment to drive up the consumption of goods and services; which in turn will benefit retailing industry. This will improve the consumer confidence as well.​​ The retailers need to be more innovative in their approach in terms of customer experience, marketing as well as positioning in order to maintain a consistent growth rate.​​ ​​ 

Another is the increasing population of the United Kingdom. By March 2011, the population of the country was 56.1 million – a 7.1% increase as compared to 2010. The increasing population directly benefits the super markets as the consumption of different products and​​ services increase. Therefore, the retailers need to take advantage of this trend and position themselves in a more appropriate manner.​​ 

Reflective Review

I started the work on my dissertation as a part of my course completion at the Queen Mary University. The task involved primary and secondary research to analyze the impact of the recession on the Tesco, Sainsbury and Morrison. As a hardworking student, I have always shown stern commitment to my projects. However, I was overwhelmed when I declared only the​​ second-best​​ student at the university which forced to work even harder on this paper.

It was a most challenging undertaking during my university experience to research and complete the dissertation with in-depth investigation and analysis. It seemed like an unreachable target; however I managed to work along with dedication, commitment and persistence to the highest level of perfection. Often, I would find myself face to face with obstacles and dead ends asking me to lose the patience; but then there was my supervisor who was there to guide me in the right direction every time. My family and my friends were always there to support me with their love, care and patience.

The experience allowed strengthening my skills and overcoming my fears. The primary research allowed interacting and working along​​ with the people of different age groups and backgrounds. It was most significant in teaching me the ways to network and work alongside them. Likewise, it allowed me to improve on my writing and analytical skills; looking at the trends, the environment and the economy and making a judgement based on all the right information.

Similarly, it taught me an important lesson. I wished to collect all the data-each and every word. However, the dissertation showed that the mind can only absorb as much as it is capable of. It taught to me to keep only the relevant information and to flush out the irrelevant facts and figures. This helped me immensely me in my analysis across the dissertation.​​ 

Overall, it was a great experience. It allowed to me increase in my knowledge from the academic journals, newspapers, reports, memos, questionnaires and books. Therefore, I strongly believe that this knowledge will be essential to be as a learner at Queen Mary University. ​​ 

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1

​​ Vitoria Trench BBC News 2010

2

​​ Justin King Sainsbury CEO

3

​​ Holly Williams, The Independent, 09 January 2013​​ 

4

​​ Holly Williams, The Independent, 09 January 2013