The tertiary sector gives an incentive of a higher profit margin as compared to the rest of the two sectors. A firm needs to achieve productive and allocative efficiency in the case of primary sector; as profit margins are slightly low in this area. In the same way, transformation of raw materials into goods has been the task for the secondary sectors. E.g. manufacturing and assembling steel into car.
‘Slower labor productivity growth in Europe than in the United States since 1995 reverses a long-term pattern of convergence. This has a negative impact on the turnover as it leads to lower growth contributions from investment in information and communication technology.’ (Bark, O’Mahony and Timmer, 2008)
On the other hand, the retail industry is central to the UK’s economy: it employs in the region of 2.9 million people – 11% of the total UK workforce – and in 2010 UK retail sales stood at over £293 billion. Yet it is clearly facing severe challenges at the moment. (Barry Knight). The high street retail market has been experiencing a downfall over the last couple of years. The most important factor is the rate of inflation, particularly in relation to commodity prices. The rising Value Added Tax (VAT) and National Insurance have drastically affected the consumer spending. This decreases the disposable income of the consumers with retailers suffering as a result. As stated by Knight that the latest figures from the British Retail Consortium, UK retail sales values for May 2011 were 2.1% down on a like-for-like basis compared with the same month a year earlier. Furthermore, it looks unlikely that conditions will ameliorate quickly as the perpetuating low interest rates and relative support from the banking sector are still maskin...
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Bart van Ark, Mary O’Mahony, and Marcel P. Timmer. (2008). The Productivity Gap between Europe and the United States: Trends and Causes. Journal of Economic Perspectives. 22, 25-44.
Barry Knight, (2011) grant-thornton, http:// http://www.grant-thornton.co.uk/pdf/Retail_The_finance_flow.pdf, 18/03/2012
DAVID FELDMAN, (11/2008) reversemergerblog, http://www.reversemergerblog.com/2008/11/17/how-will-the-economy-affect-retail-sales-this-holiday-season/, 18/03/2012
Skillsmart Retail Limited, (2009) skillsmartretail, http://www.skillsmartretail.com/Brokerage/CurrentRetailEnvironment/default.aspx, 18/03/2012
Latchezar Hristov and Dr. Jonathan Reynolds. (2007). The nature and contribution of retailing. Innovation in the UK Retail Sector [online]. 1, 9.Available From:http://www.nesta.org.uk/library/documents/inno-in-services-retail-report.pdf.
The main European competitor since the Second World War has been Germany; US market share has also dropped off from its peak in the 1950s. Whether this drop is as a direct result of the fall in comparative aggregate labour productivity is the topic of some discussion. Whilst it seems that must surely have an impact, Broadberry raises three important factors which may apply instead. Those are firstly, that UK exports were inevitably, going to decline as other ...
Many researchers have made efforts to study retail change, based on the assumption that they can gain an...
In recent years there has been major growth in the wider business world surrounding the overall influence that the retailing industry holds and because of which, retailing and the issues that surround it have become a vital influence in today’s global economy. (Fisher & Raman, 2001)
Dieppe, A., Dees, S., Jacquinot, P., Karlsson, T., Osbat, C., "Ozyurt, S., Vetlov, I., Jochem, A., Bragoudakis, Z., Sideris, D. and Others. 2012. Competitiveness and external imbalances within the euro area.
The article, “U.S. Economy slows down; Europe is on the Upswing,” shows that Europe will catch up to the United States in no time. According to The New York Times, the unemployment rate for European Union drop from ten percent to 8.7 percent in less than ten years; that is a growth of 2.3 percent. European markets have become more open and competitive and European companies have follow many Americans practices to help deliver better performance. European governments are lowering taxes, at least modestly. Wage increases have slowed to a edge and labor markets have become more flexible, as companies evade traditional job protection rules by hiring part-time and temporary workers.
For a retail manager determining location for an organisation, it must be decided whether the business holds ‘’competitive advantage’’ and whether there is opportunity to outperform competitors and capture a share an existing market. (Kim, W. C., Mauborgne. R. 2005) If a retail manager was to determine that little to no existing competitors in a location it could prove massively influential on where to base a business. (Kim, W. C., Mauborgne, R. 2005)
The retail industry is as old as human civilizations, and it’s worth noting the retail sector is much better geared to change than most sectors. Over the past couple of decades there has been a wide range of changes in the retailing business. The retail sector dates back to the early 1800’s when the first local corner store sold common household items and basic groceries. As its name states, the corner store was just that, stores strategically placed on corners on high foot traffic areas for easy access. As society started to grow so did the need for new consumer goods and how a consumer would reach those goods. Department stores became popular simply because they were able to offer an assortment of categories and a variety of items within those categories all under one roof. The first two cities to start developing large scale department stores were New York City, and Chicago. In New York in 1846, the first building was built offering a variety of goods at fixed prices that were shipped from Europe. Department stores moved away from the idea of bartering and all items sold were considered fixed. However, department stores did offer discounts and coupons as a way to get customers in the door. In 1862, the largest department store was built during this time in New York City. The department store was on a full city block with eight floors and nineteen departments of dress goods, furnishing materials, carpets, fine china, toys and sports equipment. All these items were arranged around a central glass-covered court. The glass windows quickly became a staple in the department stores design. The act of window shopping was introduced and quickly all department stores had floor to ceiling windows advertising the newes...
The demand for retail is driven by a number of factors including customer related aspects such as population size, population growth and existin...
Bibliography: Lawson, A. (2013). Analysis: Is Asda’s five-year strategy the right one?. [Online] Retail-week.com. Available at: http://www.retail-week.com/sectors/food/analysis-is-asdas-five-year-strategy-the-right-one/5054989.article [Accessed 23 Jan.
Growth in labour productivity is important because it is associated with economic growth, standards of living, and real incomes. It is another useful tool that we can use to compare the welfare and growth of countries. Labour productivity measures the amount of Real GDP produced by an hour of labour. Increases in labour productivity can occur from increases in the amount of machines and equipment available to workers, a higher proportion of skilled workers, increases in plant scale, changes in organizational structure, and improvements in technology (1).
This part of the report will highlight the problems within the external environment that affect Marks and Spencer. Before planning and decision making can take place an organisation must be aware of these issues. The key factors that impact upon all organisations are Political, Economic, Social and Technological. These factors are commonly referred to as PEST factors. Political changes like change of government could affect the minimum wage that M&S workers are paid. Economic factors such as inflation could affect the pricing of garments. The Social factors that would need to be taken into account are lifestyle changes and demographics, M&S would need to consider where their target market stood. Technological advances could also affect M&S sales just recently their website has been updated from a corporate site to a new website offering online buying. Globalisation is a huge environmental factor affecting M&S. Globalisation is the increase in cross-border economic, social and technological exchange. For organisations it increases competition and the search for cost advantages.
These aspects are considered features of the sector. It is mentioned that the purchasing power of retailing industry is focused on the side of small retail purchasers. In a flat market with difficult growth along with the consumers being sophisticated, large retail chains such as Tesco are acquiring large number of consumer information for communication with consumers. Such type of competitive market has fostered such accelerated level of development leading to the situation in which grocery retailers of the United Kingdom are required to reflect innovation in their strategies while maintaining and establishing their market share. Such innovative strategies can be observed in the development of a wide range of trading formats due to changes in consumer behaviour. The dominant leaders in the market have responded after focusing on the price and value while highlighting the additional valued elements in their services (Ndungu,
The government forecasts that by 2019, the GDP will rise of 0.2%. The consumer’s behaviour towards this economic recession will change and therefore affect the retail industry. Harrods will need to spend more money and investment in order to float or maintain business sustai...
The nature of the business of retailing puts retailers at a assumed risk of incurring costs because products are bought with the assumption that consumers will purchase. Additionally there are external factors that may also pose risks such as natural disasters, theft, spoilage and fire. In other circumstances retailers also extends financial credit to customers in the form of credit sales which facilitates the smooth transition from retailers to the marketplace. Retailers are in constant contact with customers which gives them the opportunity to research and study buyer’s behaviour. This involves collecting information about changes in customer preferences, perception and shifts in the demand curve. Through advertising within their stores retailers are able to exhibit and introduce existing and new products to the marketplace. Ultimately retailers are in the business of selling products to customers to achieve their goals of generating
The advancements in the technological world have allowed supermarket chains and other national stores to quickly dominate the market and are driving out the concept of the ‘local stores’. This surge in the market has seen shares rise and profits bulge with the three main contenders in mind being Sainsburys, Safeways and Tescos who now serve the whole of the UK between them and are the household names of the shopping world. The ICT input to these businesses is vital in that it provides speedy service; controls stock levels and will even allow bank balance transfers to be carried out with minimal difficulty or technical experience.