BUS020N570S Retail Purchasing : Food Retailing Chain

Introduction

Retailing has become more complex and challenging with thousands of stores, micro-apps, micro-suits and commerce networks covering multiple geographies, and that too with the consumers who expect to purchase, be fulfilled and to be able to return anywhere (Kim, Allaway and Ellinger 2015).  Being in touch with the consumers is a key challenge for all the retailers. The concept to create frequently refreshed, the local markets has emerged as a way to further accurately tailored merchandise offerings to the market demand.  This essay will focus on the role of purchasing and supply in the Sainsbury super market. It will discuss the primary components of the purchasing and supplying chains and it will briefly analyse the implications of management as well. The essay will further elaborate on the financial implications of purchasing and supply decisions of Sainsbury.

Sainsbury is regarded as the third largest chain of supermarkets and the longest standing food retailing chain that is situated in United Kingdom (Baines 2014). It supplies about 16.9 per cent share of the entire United Kingdom’s supermarket sector. Sainsbury was founded in the year 1869 by Sir John James Sainsbury (Sebora et al. 2014). It was observed to experience a benefit for a specific constancy of management, which evolved from the family control. The aim of the brand is to become the most trusted retailer in the retail industry, where people would love to shop and work. Their main goal is to make their consumers’ lives easier each day by giving them great quality and services at the fair prices. The brand focuses on designing its strategy in a way in order to mention the changing marketplace in people shopping patterns. It is based on five important pillars and they are- great products at fair prices, staffs making the difference, they know their customers better than anyone else, they are there for their customers, and their values make them difference. Being one among the major and the longest food retailing chains, the very first Sainsbury store was established148 years ago. This retail giant serves approximately 16 million customers weekly. There are more than 400 supermarkets and 301 Sainsbury stores in the United Kingdom (Metzger 2014). About 148,000 employees are dedicatedly delivering great products at Fair Prices. Sainsbury has experienced a healthy growth in the past few years. Along with the food and goods retailing, it also provides the services in the banking, insurance, and the electronic sector. It is entrenched on generating different varieties of strategies to meet the consumer demands. The strategy for the marketers, serves as a mentor for positioning the products, to perform the tasks in various aspects as well, related to the marketing mix.

Purchasing decisions

The consumer, while making purchasing decisions, is observed to have narrowed their consideration set while considering the opinions of other people around. Various unforeseen circumstances might be considered as valuable in this stage. According to the Maslow’s hierarchy of Needs, the customer decision making involves several reasons. It is primarily observed that the consumers prefer to buy such products that they feel like is important to them and while considering the esteem needs, they prefer to buy certain products that highlights their status as well (Niemela and Kim 2014). There are times when the encouragements for buying such products are often supplied by the family members and peer of the consumers of Sainsbury. In addition, the social needs are also some sense of belonging, which the consumers of Sainsbury develop interest of buying, also, the safety need is for the reliability and the security of the customers. The most basic needs of the consumers are the psychological needs and in order to buy basic needs, no influence is being supplied to them, as buying what a person need is not subject to influence. The attitudes of the consumers are measured as the beliefs that are been followed by that person and it has been found that their attitudes do throw a great impact on their purchasing decision. In prospects of the attitudes, the consumers of Sainsbury are observed to make decisions like, whether or not they would purchase the product, would they repeat the purchase of a particular product depending on it quality and after making a repeat purchase of the products, would they be likely to become the loyal customers of the Sainsbury. Hence, the purchase decisions of the consumers are often influenced by the attitudes, beliefs and opinions that are supplied by the reference groups (Ladhari and Michaud 2015).  

Assortment plan

The assortment management tools streamline the planning of thee local assortments. A mass customization takes place in according with the local demand of Sainsbury and the customer portfolio, in amidst a planned local assortment (Suel and Polak 2017). However, the automated analysis may use comparatively lesser assortments for the local retail market but the automated analysis are a great help in trading with the mid-size suppliers, especially in the planning of excellent shelf space. In addition, the local assortments of a large and centrally controlled chain shall hardly ever apply to the small suppliers because of their small volumes; also, it may be difficult for the small suppliers to meet to the seeking procedures and the quality requirements.  Sainsbury provides a visual and end-to-end workflow in order to define and implement local market and micro-suite assortments so that they improve the conversation of traffic into the margin and for increasing the customer satisfaction. Sainsbury is helping the local suppliers in developing their operations with Supplier Development programme in order to ensure that the suppliers’ procedures and the product quality, both meet the Sainsbury requirements (Ramanathan, Bentley and Pang 2014). Engaging in operations with the big retailers are a double or nothing solutions for many suppliers as they quickly become reliant on the volumes that are sold to the retailers.

Own Brand

Sainsbury have revamped its budget range of value products with a new range of own-label “Sainsbury” and “Sainsbury basic” brands. It steps up its fight against the German discounter Lidl (Szmigin and Gee 2017). It hopes that the coloured-coded bright packaging using the fictitious British-style brand name will attract the consumers. The range is a long-term inclusion to its shelves.  The prices of the fruits and vegetables varies from 35pound for a lettuce to 1.6 9 euro for a pun net of raspberries (Lan and Dobson 2017). Sainsbury’s own-brand products display easy-to-read the nutritional and allergen labels.  There are hopes that in the coming year will be better year for the United Kingdom’s supermarkets that  have been hit by the price which is triggered by the rising competition from Tesco, Lidl and Aldi.  

Distribution System

In current days, the chain includes over 500 supermarkets and near about 300 convenience stores. Each Sainsbury store offers compatible non-food products and services (Sogn-Grundvåg, Larsen and Young 2013). Some of its stores operate an online-based home delivery service as well.  Earlier, Sainsbury had six different channels from the supplier to the Regional Distribution Centre but in the current days, it has more than thirty channels including the Primary Consolidations Centres and the cross docking. However, according to the recent survey, it has been noticed that the supply chain of Sainsbury was unable to deal with the demands of its consumers and the store network. Earlier, Sainsbury needed the advanced supply-chain system infrastructure (Gonzalez 2017). Later after a thorough review of solutions, Sainsbury chose the Manhattan’s Warehouse Management solution in order to Open Solutions and collaborative commerce platform. It is serving all types of consumers and it is conscious about serving some lower middle as well as it has a wide range of products that can serve the consumers in United Kingdom. The retail sectors in United Kingdom has always been in the focal point of contentious subjects that are concerning global rivalry, corporation presentation,   price wars and  the alterations in plan and they are effectively serving within a large range.

Inventory Management

The nature of the operations in Sainsbury has been so distinct that each department of the store has its own operation in order to make sure that there is a security of supplies and a more safer mount in the inventory management without undermine anything in cost. The Kraljic procurement matrix has helped the Sainsbury’s process of procurement become a strategic one. The primary factor that involves in the process of ensuring the classification of the purchase is indexing the purchases depending on supply risk and the impact of profit on a product. The second factor is concerned about the analysis of market and the third step includes strategic positioning. It is all about ensuring that the highest profit impact items are purchased, while currently reducing the high risk of ineventory supply excess or shortage. The various aspects of Kraljic matrix consisting successful influence of the supply deals depends on the enlarging buyer power, supply continuity, effective cooperation, and the efficient usage of the resources are important in examining the Sainsbury’s operations, also, it will be engaged throughout this essay (Mantere 2015). New technology has been implemented in order to ensure that the best of it is utilised. Wide ranges of new and advance systems are implemented in the areas like trade, finance, human resource and in the procurement among others as well. It has been supported by applying latest hardware and software system by the IT department of Sainsbury.

Customer Service

 “Excellence” has always remained a very significant word in customer care (Christopher 2016). When adding terms like “customer” and “service” to excellence, the resulted phrase ends up in a company striving and being creative and passionate in their attempt to satisfy their consumer in a great manner. There is a varied range of products or items that is offered and sold in the Sainsbury super market. It starts from offering clothing, gift items, computer peripherals, books, kitchen appliances, food products, groceries and many more. The main aim of this super market is to gratify its customer by providing them great shopping experiences. They also take into account the Excellency and quality of products at a very fair price (Faulkner et al. 2014). However, the prices may differ on a daily basis as well. They furnish their customer with safe, fresh, tasty and healthy food at a price that is reasonable and ensures an excellent consumer service (Scarborough et al. 2015). The customers are greeted with a friendly smile and pleasant word while entering into the market. The customers can purchase a ‘fits all’ trolley for shopping in the Sainsbury supermarket worth £1 at the Sainsbury customer service desk. The store gives loyalty points as well for using their bags. The customer service desk provides the customers with in-store nutrition and dietary advice; also, their online website provides them with online nutrition advice services. Each store in the Sainsbury supermarket accepts cash, credit cards and debit cards, which makes convenient for the consumers to make purchasing. The large range of products along with the ever-growing range of fair-trade and organic products and the free from products are of major advantage to the Sainsbury consumers. They also have the availability of only shopping site so that their customer can experience convenient shopping. However, the disadvantages for the Sainsbury consumers are that the prices can alter on a daily basis and varies from store to store. In addition to this, the online buyers pay their delivery day’s price only (which changes daily).

Conclusion 

Behind every large company to the minor stores, there is to be a good system that makes it run. It can be concluded from the above analysis that purchasing and supply in Sainsbury plays a very important role in its business management. Sainsbury has a huge variety of products for its customers and it is focusing more on its customer’s needs and demands as well. It is serving better without making any sort of difference in consumer from where they belong. Further, Sainsbury is aiming forward to become one of the more consumer-oriented supermarket.  The strategy seeks to direct the organisational culture all round the consumer service by pivoting on the access on services.  

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