The food retail market in UK has developed considerably and the competition in the market is highly cut-throat. However, the food retail sector has faced the brunt of negative inflation. Domestic markets have become disoriented and the chances of entrepreneurial ventures, mergers, franchising and acquisitions have increased twofold due to the demand for overseas expansion. Issues with land resources have been aggravated further by the government regulations which impose restrictions on planning of shopping facilities outside the town. This factor stands as a major hurdle for expansion of supermarkets (Morley et al.., 2016). Furthermore, a trend can be observed which indicates setting up small stores in prominent urban locations and capitalize on the convenience of shopping provided to consumers through these stores.
The higher percentage of older population, fewer housewives and higher inclination towards eating outside are some of the demographic changes which have changed the nature of the UK food retail market. Customers are focusing on additional value provided to them for their money on products and services. Some other demographic trends which impact grocery retailers like Tesco Plc in UK are the cost reduction efforts; share in business as personal label, changes in the supply chain and the prevailing silence on hiring new suppliers among national retailers. Most prominently, the tendency of consumers in UK for hygienic food and environment friendly food packaging can impact the plans of existing and emerging food retail outlets in the UK. The experiments of consumers in UK with food have resulted in demand for exotic food materials and consumption of better quality products. These changes have resulted both quantitatively as well as qualitatively.
Tesco Plc is currently the largest food retailer in UK. The prospects for development in emerging markets are surrounded by the doubts of competition. The company’s intentions to expand within domestic markets have been stalled by the government’s decisions to appease the requirements of local communities. Infringement laws and patent claims have haunted Tesco’s expansion plans in foreign markets. However, the organization has sufficient opportunities to reach international markets. The retailing sales in the Euro Zone have shown a considerable growth rate of 33% while the sales in Asia jumped by 11%. The growth rate in Asia climbed despite first half interference due to setup and operations cost in China. Around 80% of Tesco Plc’s capital has been directed towards growth in international markets.