The Effects of the Recent Economic Downturn on the Super Market Industry



The Effects of the Recent Economic Downturn on the Super Market Industry

Introduction

A supermarket or the department store is a large retail store, where the food, beverage and also next most drugstore products are offered and other products offered for daily needs. The goods are for self-service delivered to customers. The global supermarkets sector is tending towards increased concentration, with a large number of players operating within international and local markets. However, a clear world leader is present, namely Wal-Mart, which accounts for around a quarter of global revenues. Overall rivalry is assessed as moderate (Bunte, et.al, 2006). Players have a wide variety of potential customers, which considerably weakens buyer power.

A number of manufacturers have established strong brands, which results in many market players stocking products to meet end consumer demand. However, the increasing number of players manufacturing own brand products, puts many suppliers under significant pressure. New entrants will have difficulty competing with larger incumbents who benefit from scale economies in purchasing, distribution and advertising (Cruikshank, 2008). High capital outlay and planning permission for large-scale retail outlets will dissuade new entrants. Strong sector growth lessens competition and attracts new entrants (Savona, et.al, 2011).

Financial Crisis and Supermarkets

The current economic crisis has serious impact on local and regional supermarkets in United States and European countries. Many are experiencing significant reductions in their direct income and resources available to them through national budgets, while the demand for public services is increasing and that the economic difficulties result in a loss of income and various problems which are connected to the home. The Supermarket concept is a legacy of war boom, a symbol of modernity and positivism; it has upset trade rules and shaped in profound ways the habits of many developed countries. Despite laws and resistance of certain lobbies to expand the commercial jurisdiction of hyper to new areas, to slow its progression, the concept was carried by the neoliberal wave of the early 80 years and continued to meet the expectations of the new postmodern consumer (Burch & Lawrence, 2007). Today the context has changed dramatically under the pressure of environmental constraints, the financial crisis, and soaring commodity prices. Therefore it is legitimate to ask whether the new context of the Supermarkets system in which we operate, is able to host the hypermarket concept. The hypermarket is a legacy of the war boom alongside the car and television. As for the car and television, the future of hyper is uncertain. It is all the more precisely that its future is linked to that of the car and the television, because the limits of development of hypertension will be dictated as much by changes in its natural world, by changing its own ecosystem (Cruikshank, 2008). But also and above all, a limit rarely integrated by the marketing men, the limits of the mind (Della & Talani, 2011).

The food crisis has left without food for thousands of people ...