UK Retail Sector Analysis

This has been brought about by various changes in the market. PESTEL is market environment tools that assess the various external factors that influence business. It stands for Political, economic, Social, Technological, Environmental and Legal environments (Rachet, 2014). These factors are outside the control of the business and may affect it greatly. Starting with the political environment, UK has been a hotbed of intense political activity in the recent years. The cost of living as an effect rose to the level of 7. 83 per hour (Srovnalikova & Razinskaite, 2017). This is in addition to the exchange rate which worsened in the period leading to Brexit and after. Other changes such as apprenticeship and business charges also increased significantly which worsened the condition of many retail outlets.

This has led to the increased costs of doing business which has resulted in the closure of some of the stores. Emerald insight gives a British a tough score as the place with the tightest and dynamic environment for doing business in the world (Omar et al. This is manifested in the avalanche of online stores which are coming directly with traditional brick and mortar stores. The convenience, as well as the costs savings that come with such purchasing the online sectors, has left many stores without traffic. The legal environment is also to blame to a certain extent. Competition watchdogs are on the outlook for the strategies that are being taken by the store to re-engineer their process. This international coverage is one of its strengths.

Thus the company is able to cushion shirt terms turmoil through the effective sales of the unaffected areas. Additionally, Tesco operates outlets which are scaled down to a semblance of specialization. There is Tesco clothing, Tesco Food among others. This makes it easier to drop an underperforming unit without affecting the sale of the other (Wong & Wei, 2018). Also, Tesco has not been able to ensure anticipate the change in consumer trends as intended. The change in market preference from nonfood to food items is an inherent cost which should have been prepped for. The store also has several opportunities at its disposal. First, it can strengthen its sectoral segmentation for strategic market coverage. Most retail stores are wholesalers of groceries, food clothing among others.

This is due to the changing consumer wave and the increased pressure for business remodeling that is engulfing the country. This forms two threat which is one for substitution and new entrants. Online stores are increasingly becoming the preferred way of shopping (Fuller, 2018). Thus it should rethink its bricks and mortar operations and make them more efficient. Additionally, suppliers form another threat where they can find their bargaining power increasing in due to the newly found outlets and economic effects (Wang et al. The Guardian. Retrieved from https://www. theguardian. com/business/2018/jan/22/tesco-to-shed-1700-jobs-in-new-management-shake-up Dhingra, S. , Ottaviano, G. (2018, January 28). Tesco names 43 stores to close in the turnaround plan. The Guardian. Retrieved from https://www. theguardian. (2018, May 14). Asda and Sainsbury's merger 'will put 13 stores in the north-west at risk of closure'.