PESTLE and SWOT analysis of Sainsbury’s 2017

By: Jonathan Kush

In 2016, Sainsburys, the UK 's second largest food retailer completed the acquisition of Argos and Habitat in a move designed to increase its non-food offer and retail space. In 2018, it announced a possible merger with third placed rival Asda in a move designed to increase its buying power and market share to make 'Sainsdas' the biggest supermarket chain in the UK. Using Pestle, Swot, Porters Five Forces and BCG Matrix analysis, this report examines the food retailing industry in the UK to reveal the major macro trends and competitive forces driving and shaping it, resulting in losses and gains for different players. For instance, between 2014-2017, Sainsbury's experienced consecutive year-on-year sales decline as well as falling profit margins as different factors including Brexit-led decline in consumer spending, price wars, unemployment and the rise of hard discounters all played a key part in negatively impacting it's performance. This report examines the company's current strategies to assess their longterm effectiveness as well as recommendations for how the supermarket can take advantage of existing strengths, macro environmental opportunities while leveraging current resources and capabilities to thrive in what is fast becoming the most competitive industry in the UK.

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