The world economy is in turmoil. Supermarkets are no different, as we Essay

The world economy is in turmoil. Supermarkets are no different, as we discovered during the year - Essay Example Retailers are in a position to exploit buyer power to distort competition. However, many retailers have had to change their offers and strategies in the face of the current economic turmoil. Grocery retail is the largest retail sector in the UK and four large retailers - Tesco, Sainsbury, Asda and Morrison/Safeway dominate the national market (Dobson, 2006). These four supermarket retailers have primarily positioned themselves as â€Å"one stop shops†, and they offer a wide range of goods. Waitrose falls under the smaller supermarket chains along with Marks & Spencer’s, Somerfield and Booths. Then there are the discounters such as Aldi. Supermarkets dominate the UK’s food system as food groceries are sold through a handful of retailers (EAFL, 2008). The supermarkets are more likely to be affected by the recent economic turmoil because they are dependent on banks and other financial institution for their capital whereas the smaller retailers are much less dependent on external capital (EAFL, 2008). This is the reason they are much more resilient in the face of economic turmoil. While some face losses due to financial recession others reap benefits. Due to recent financial turmoil the discounters have seen their customer numbers increase and their profits rise as the large supermarket chains have seen a reduction in profits (The Money Stop, 2009). The reason cited is that consumers are trying to save money by shopping at discount stores. The discount supermarket stores have benefited from the economic turmoil because the rising inflation has prompted the shoppers to trade down and choose cheaper stores and brands (Finch & Wearden, 2008). Customer is the focus of any strategy by any retailer and Tesco says they listen to what the customers want during the period of economic recession (BEN Rooth, 2008). They recognize that this is the most important time to recognize the needs of the customers because food is something that cannot be given up