Research Skills

1) Title for dissertation

An investigation into whether the driving success of the Tesco brand will cause a negative effect on the food retail industry.

2) Introduction

The intention of this research is to investigate whether Tesco’s continuing growth in the United Kingdom is having a negative effect on the food retail industry. Tesco have grown from a standard food retailer to becoming the third largest food retailer in the world in just 10 years. My aim is to investigate whether their rise to the top will have major effects on competition and suppliers.

I have chosen to investigate the effects of Tesco’s brand power as it is becoming increasingly opposed. This is due to growing evidence that indicates that Tesco's success is partly based on trading practices that are having serious consequences for suppliers, farmers, overseas workers, local shops and the environment.

I am also interested in how Tesco has diversified into other markets including electronics. I aim to investigate whether they hope to specialise in such markets to compete with the likes of Dixons or whether they will continue offering a limited supply to their customers.

3) Objectives

• To analyse the effects of Tesco’s ongoing growth and how it is effecting the competition within the food retail industry.

• Review Tesco’s current market share and investigate their aims for expanding over the next ten years.

• Consider whether Tesco’s diversification into new markets will have a negative effect on the competition within these industries.

• Is Tesco’s buying power is having a damaging effect on suppliers?

4) Literature Review

Tesco leads as super Mason’s supermarket

This text includes an interview with Tesco’s marketing director Tim Mason. The interviewer Elen Lewis questions Tim Mason about brand innovations and creating techniques to keep the customer the centre of their business decision making. Tim Mason suggests that Tesco’s growth is bound to effect the competition but this happens within all industries, he is quick to mention how Tesco were “Out of step with their customers during the late 80s”. This is important to my objectives as this shows that a senior Tesco executive is simply trying to dismiss the fact that Tesco are driving out their competition. Tim Mason is also asked about Tesco’s extremely low prices. He states “We continue to invest on price which puts our suppliers under pressure, but it also puts our competition under pressure”. This is also important to my studies as I wish to investigate Tesco’s buying powers and how it is affecting the suppliers.

Keep it local and save our small shops

This press release contains factual information that gives support to the argument that Tesco is driving local high street shops out of business. It is relevant to my research as it emphasises the fact that small shops are currently struggling to survive due to the power of large supermarkets. Stating that “More than 2,000 independent shops went out of business in 2004”. It also states that “Tesco alone has over 30% of the market share”. This shows Tesco’s dominance within the market. It also argues the fact that shopping locally is beneficial to the community. This enforces the argument that Tesco’s ongoing growth is having damaging effects on local competition. I feel that this article is biased as it is a friends of the earth press review. But if I am going to investigate whether Tesco’s ongoing growth is damaging for the competition I will need to analyse information for and against the argument.

Office of Fair Trading refers Supermarkets to competition commission

This text includes factual information that shows the Office of Fair Trading views regarding the increase dominance and buying power of the big supermarkets. The text questions the Competition Commission to “Conduct a speedy but thorough investigation to find tough remedies that will help small shops to flourish and protect farmers from bully behaviour”. This text is relevant to my research as it emphasises the problem that Tesco and other big name supermarkets are driving out local competition and using their buying power to encourage suppliers to drop their prices. This article is also biased as it has been taken from the Tescopoly website. This website is supported by organisations concerned about the market-distorting power of the major