Nalyse the structure of the UK supermarket sector

The project brief

Your group is required to analyse the supermarket industry and should answer the questions below. Each question states the mark allocation, indicating the importance of each question. NOTE: 5% of marks are for completion of the reflective statement.

1. You should do a 100 word introduction to your project.

2. Outline the trend in sales by the major supermarkets over the last 10 years, and analyse the structure of the UK supermarket sector. To do this, you should;
” identify the main companies involved and their market shares.
” explain what type of market structure exists, with supporting evidence.
” explain, using economic diagrams, how price and output is determined by a typical firm (ie: one supermarket) which is operating in the market. (Note that your market will be imperfect competition, not perfect competition. Thus, you cannot use supply and demand diagrams).
(25% of marks)

3. (a) Define  recession and  credit crunch .
(b) What has been the impact of the credit crunch and recession on the major supermarkets, such as Tesco and Sainsbury? How have they responded to this? (Use the relevant elasticity as part of your answer). How does this behaviour relate to the type of market structure you identified in question 2 above?
(25% of marks)

4. With reference to economic theory, explain why there is a need for Competition Policy in the UK. Outline a case where supermarkets have been investigated, and comment on the outcome of the investigation.
(25% of marks)

5. (a) With the aid of supply and demand analysis, including the relevance of elasticity, EXPLAIN what happened to oil prices between July 2007 and July 2009.
(b) What is the likely impact of this change in oil prices on supermarkets.
(15% of marks)

6. As part of your conclusion, assess the future of the major UK supermarkets.
Do you foresee future growth, stagnation or decline? (5% of marks)


The word limit is between 3000 and 3200 words. Anything in excess of this will be penalised. Remember this must be your own work; work handed in which has just been copied from a series of sources will be failed.

You must show that you understand relevant economic theory and be able to apply it to the business world.


Useful References

Please DO NOT tear pages out of journals, as other students need to read them.

Sloman J,  The Economic Environment of business ,

Begg D & Ward D,  Economics for Business

Ferguson K,  Essentials of Economics

The Times,  Aldi throws down a gauntlet to Tesco , 29 August 2008

The Times,  Sainsbury s Christmas surge defies retail gloom , 8 January 2009

The Times,  Morrisons outstrips its rival over Christmas , 22 January 2009

The Independent,  Credit crisis: Now here comes the recession , 15 October 2008

Assessment Criteria

 The project will be more coherent, and may include interesting and/or original reflections, supported by economic theory and analysis.

 There will be clear evidence of the application of economic theory to the industry, and evidence of work as a group. Economic diagrams, that clearly help the argument and are linked to the topic, are expected.

 All information and references are related to the UK books and writing style.

Intended learning outcomes

The intended learning outcomes are that on completion of this module the student should be able to:
1. Appreciate the global nature of business
2. Show understanding of the economic basis for business
3. Demonstrate an understanding of the markets within which a business operates
4. Identify the impact of Government policy on business
5. Show awareness of current issues and their impact on the strategy, behaviour and management of business

Reflective statement

You should briefly answer the following and hand in with your project. NOTE: 5% of marks are for completion of the reflective statement.

1. As a group, outline

a. How you ensured you worked effectively as a group.

b. Anything that did not work out as you expected.

c. What you would do differently.

2. As a group, identify one good thing about your presentation that you received in feedback, and one thing you could improve upon.