University Name

Analysis of Consumer behaviour in

recession:
Study of a UK based Company
TESCO
Masters Level Dissertation

Students Name:

Course Name: MBA in Business Management

Instructor Name:

ABSTRACT
Understanding consumer buying behaviour in recession in UK is the aim of this
research. A number of decision making processes are involved complex consumer behaviour
phenomenon related to the monetary determinants, social interactions, and market incentives.
The purchasing patterns of consumers are the focus of scholarly researches in present decade.
The complex behaviour of consumers is difficult to predict and control, but the study of this
behaviour is significant for manufacturers and retailers as consumers are main source of
revenue generation. The understanding of consumer choices, market trends, and financial
constraints is achieved through exploring consumer behaviour.
The current financial crisis has changed the consumer purchasing trends to a great `extent;
this study is focused on analysing these patterns of economic and social aspects of UK
consumers. The focus of research is to reveal the affects of present recession on the
purchasing behaviours at premium retailers outlets.
Data analysis of conducted research has put forward significant findings of recent patterns of
purchases. The secondary and primary research followed a descriptive framework to verify
the suggested propositions. These hypotheses verified the conscious behaviour of consumers
in restricting their shopping budgets, made economical choices, and trust on established price
leaders in retail business. New trends of online grocery markets have been identified and
suggestions have been forwarded to the retailers to use strategic online practices in their
business in order to reduce transaction and storages costs.
Tesco case study, the selected giant retailer of UK, has been studied in detail to identify its
strengths, opportunities, threats, competitive strategies, and criticism in domestic and foreign

4
markets. In this financial crunch, the company should integrate and diversify its marketing
strategies with more emphasis on enhancing and maintaining operations its online grocery
markets with improvements in Tesco.com. Company also has to overcome criticism by
increasing its corporate social responsibility roles in local and overseas businesses.

Table of Contents
1.1

Purpose of the study........................................................................................................5

1.2

Background.....................................................................................................................5

1.3

Case Study Approach......................................................................................................6

1.4

The aims and objectives..................................................................................................6

1.5

Research questions.........................................................................................................7

1.6

Hypothesis development.................................................................................................7

1.7

Hypotheses......................................................................................................................7

1.8

Significance of the study................................................................................................8

1.9

Scope of the study..........................................................................................................8

1.10

Thesis structure...............................................................................................................9

2.1 Consumer Buying Behaviour.............................................................................................12

2.2 Consumer Behaviour Classification...................................................................................12
2.2.1

Programmed behaviour:............................................................................................12

2.2.2

Limited decision-making:..........................................................................................13

2.2.3

Extensive decision-making........................................................................................13

2.2.4

Impulsive Buying Behaviour:....................................................................................13

2.3

Consumers Emotional Involvement.............................................................................14

2.4

Conflicts of Approach Avoidance.................................................................................15

2.5

Impact of Retail Environment on Purchases.................................................................16

2.6

Influence of social factors on consumer behaviour.......................................................17

2.7

Influence of Product attributes......................................................................................18

2.8

Impact of Financial Crisis on Buying Behaviour..........................................................18

2.9

Impact of technology on buying behaviour..................................................................19

3.1

Research design............................................................................................................21

3.2

Research Approach........................................................................................................22

3.3 Choice of Variables and measurement.............................................................................24

3.5

Sample Designing.........................................................................................................24

3.5.1. Applicable sample population........................................................................................25

3.5.2. Sample Size....................................................................................................................25
3.6

Data Collection.............................................................................................................26

3.7 Triangulation of study........................................................................................................28

3.4

Data Analysis Methods...............................................................................................29

3.8.

Questionnaire Designing..............................................................................................29

3.5

Ethical issues...................................................................................................................30

3.7

Data Analysis..................................................................................................................31

3.7 Limitations of the study.....................................................................................................31

6
Summary..................................................................................................................................32
4.1

Financial crisis in UK....................................................................................................33

4.2

Tesco-Company Overview............................................................................................35

4.3

Tescos PESTLE Analysis............................................................................................36

4.3.1

Political.....................................................................................................................36

4.3.2

Economic...................................................................................................................36

4.3.3

Social.........................................................................................................................37

4.3.4

Technological.............................................................................................................37

4.3.5 Legal................................................................................................................................38
4.3.6
4.4

Environmental...........................................................................................................38
Tescos SWOT Analysis................................................................................................38

4.4.1

Strengths....................................................................................................................38

4.4.3

Opportunities.............................................................................................................40

4.4.4

Threats.......................................................................................................................40

4.5

Competitive Strategies..................................................................................................41

4.6

Criticism in domestic business......................................................................................42

Criticism in Overseas business.................................................................................................43

Conclusion................................................................................................................................44
5.1

Data collection Analysis................................................................................................45

5.2

Major premises of study................................................................................................46

5.3 Consumer Buying Trends...................................................................................................47

5.4

Data Analysis and Findings...........................................................................................47

5.4.1 Criteria of Selection of Shopping Place..........................................................................48

5.4.3 Preference of a grocery chain..........................................................................................51
5.4.4 Consumers experience of Purchasing............................................................................52
5.4.5 Change in Consumer Saving Pattern...............................................................................54
5.4.6 Change in Shopping Habits.............................................................................................55
5.4.7 Change in Multiple Expenses..........................................................................................57
5.4.8 Cut down in Multiple Expenses......................................................................................58
5.4.9 Current Shopping Behaviour...........................................................................................60
5.4.10 Online Shopping Behaviour..........................................................................................61
5.4.11 Communication with retailers.......................................................................................62
5.4.12 Preference of Online Communication mode.................................................................64
5.4.13

Online communication preference............................................................................65

5.4.14 Preference of Retailers Information..............................................................................66

5.4.15 Preference of Purchase coupons....................................................................................68
5.4.16 Social networking of retailers.......................................................................................69

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6.1

factors drive consumers buying decisions in recession.................................................70

6.2

The most suitable marketing tools during recession.....................................................72

6.3

Core challenges and practices of consumers in UK retailers........................................74

6.3

Case Study Analysis of Tesco.......................................................................................76

6.4

Summary.......................................................................................................................79

7.1

Conclusion and Recommendations...............................................................................80

7.2 Personal Reflection............................................................................................................82

Chapter I
Introduction
The onset of financial crisis resulted from the collapse of two major banks in 2007 namely
the Lehman Brothers in USA and the Northern Rock Building Society in UK (Shiller, 2008)
along with the simultaneous fall of Bradford & Bingley (B&B) (BBC News 2010). As a
consequence it leads to the widespread of financial crisis. But the question here is why it took
place to such a large extent even though there are several financial models that constitute the
control of financial risk from the early 1950s (Shiller, 2008).
In order to answer the above question, lets look on some of the major reasons for its
cause. Any large business house, consumer expenditures or governmental schemes may
borrow public money in the form of selling shares. It is the function of large financial
institutions, such as banks, to issue or generate credit transactions. A smooth inflow of credit
between the borrower and the lender is what establishes ideal market conditions. A credit
crunch occurs when there occurs a lack of obtainable credit in the market and the borrowers
cannot find adequate finance. Usually such a phenomenon happens when the creditors are
unwilling to invest more money or hike up their interest rates to such exorbitant levels that it
becomes virtually impossible for the lender to borrow.
The central question, then, is why do the creditors suddenly refuse to invest more money?
Actually, far from being an isolated fact, it is a part of a complex chain reaction. The lenders
reel under deficit money supply when they fail to realize the interest or even the actual capital
they had invested on companies or institutions, which accrued a disastrous amount of losses.
Such loss incurring companies cannot return the money they had borrowed from the creditors
and have to default payment. However, when the prices begin to fall, even the bank has to
sell out at considerably lower prices and suffer huge losses. Consequently, their ability to lend

9
money is severely crippled. In certain cases, the banks are required to raise the level of capital
reserves and to comply with this have to restrict lending. Even when banks perceive a risky
market, interest rates may shoot up to discourage lending to credit crunch.

1.1 Purpose of the study

In context of marketing, consumer behaviour is a well researched topic and beginning to be
of greater importance in the context of buying decisions in recession. In order to improve
marketing strategies by retail marketers, gaining an understanding of individuals behaviour
and needs is crucial to effectively deal with consumers. Especially in crisis situations
individual behaviour differs and leads to panic and market anomalies. Therefore, purpose of
this study is to explore the factors driving individual behaviour in times of financial and
economic crisis helps in applying the right measures and policies with an informative
background. In order to mitigate the aftermath of the crisis, avoid bankruptcies and to
enhance recovery, an understanding of individual behaviour appears to be ever more
important to the big organizations.

1.2 Background
There is a considerable decrease in the economic growth due to recession that aroused from
the failures in the collateralized debt obligation markets which are the sophisticated financial
tools (Kambil, 2008). The world has seen such crisis in the past and incorporated different
methods as bailout plans. The 1932-53 crises called for reconstruction of Finance
Corporation and the trigger was Great depression. The 1989-95 crises needed Resolution
Trust Corporation and the trigger was savings and loan crisis. Here 747 small companies
were affected and the cost was $300 billion where the initial cost estimation was $50 billion.
In other countries too, like Sweden (1992-96) and Japan (1996), the resolution was in form of
Bank Support Authority in Sweden and Resolution and Collection Corporation in Japan and

10
in both the cases, the trigger was fallout from a real estate bubble (Reality Sandwich 2009).
However, it is an interesting aspect in this context to study the behaviour of retail business
during these recessions.

1.3 Case Study Approach

The changes in UK consumer behaviour brought about by the recession are likely to remain
in place during and after the economic recovery, a new study has found. A survey reported
that 48% of participants believed they were worse off at present than was the case six months
ago (data monitor 2010).
Datamonitor (2010) proposed that many respondents have moved beyond simply trading
down to cheaper products, and are adopting a wide range of strategies in a bid to contain their
expenditure levels. The selected case study, Tesco is the UK's biggest supermarket chain, has
attempted to reflect the fluctuations in behaviour of consumers in their routine business
activities. This study will facilitate to discover and achieve research objectives.

1.4 The aims and objectives

The aims of this research are listed below:
1. To analyse consumer behaviour during a period of recession
2. To investigate the challenges the retail stores that come across during recession
3. To determine marketing strategies that are in practice to enable organisations to cope with
recession
4. To make recommendations to the retail stores on how they might operate in a period of
recession

1.5

Research questions

The future research will endeavour to determine the most probable solutions to the following
research questions:
1.

What are the core challenges and practices of consumers in UK retailers during

11
recession?
2.

What factors drives consumers buying decisions in recession.

3.

What are the most suitable marketing tools during recession used by successful
organisations to attract consumers?

4.

Does analysing the operation of retail stores will produce significant

recommendations to the stores operating in UK?

1.6 Hypothesis development

The hypothesis was designed in order to best meet the investigative needs of this study and
allow a feasible statement in which to conduct primary research methods. It is felt that
corporate image and retail stores are important to Consumer behaviour in recession and to
asses this, it (retail stores) had to be tested against the notion of 'success' in order to generate
a conclusion to the role corporate image and retail stores play within the industry during
recession. Being interested in marketing and recession the development of the study was
simple. It was formulated to produce an interesting title in which to form the hypothesis (the
'testable statement'), whilst putting a different swing on the marketing aspect, rather than
simply just concentrating on it as an entity (Raithel et al, 2010).

1.7 Hypotheses
On the basis of above research questions, following hypotheses have been developed:
1. The strategic marketing strategies are important management tools in recession in retail
chains of UK.
2. Consumers follow identical practices and face same challenges in recession irrespective of
the type of retail business.
3. Price sensitivity and economies of scale become the important elements in buying decisions
of consumers in recession.

12

1.8

Significance of the study

The present research is important for the academic learning and practical applications of the
learned concepts for the researcher. The knowledge of consumers buying decisions, the
techniques of strategic marketing planning, and retail management practices in actual mega
chains of retailers will facilitate the researcher in practical life. The processes of marketing
strategies analyses involve in influencing the buying decisions of consumers have a
significant impact on the study outcomes.
This research would help academicians, students, and corporate managers to understand the
role marketing activities in retail and consumer patterns. The usefulness and demerits
identified in the upcoming chapters will establish the practical implications of the effective
strategic marketing. The case study analysis of the mega retail stores chain Tesco will help
managers to understand the mechanism of consume decision-making in recession. Thus this
study will provide the basis for further research in this area, and will provide the necessary
details of consumer behaviour in recession.

1.9

Scope of the study

The present study will emphasise on the extensive use of primary research based on surveys,
interviews and secondary research based on material retrieved from free available scholarly
journals. The detail case study analysis of UKs largest retail stores chain Tesco is done in the
study to analyse practical behaviour of consumers. The data retrieved from company site and
other reliable online sources.

1.10 Thesis structure

13
This thesis is divided in many chapters in a sequential order to explore the issue under study.
The organisation of the study is as follows:
First chapter is the introduction which is used to initiate the topic of research and its
proceedings. The contents included in this section are purpose of the study, background,
problem statement, research objectives, research questions, hypothesis, studys significance,
scope and organisation of the research.
The second chapter presents an extensive literature review of the consumer behaviour
theories and the implications of the marketing tools in consumers buying decisions. The
literature review in this chapter is composed of journal, books, and case study reference
related to the topic.
Chapter three is the research methodology which deals with the research approaches,
methods, and theoretical approaches to be used in the present research. Ethical
considerations, limitations, and resources and planning are the other main components of this
section.
Chapter four presents the detailed analysis of the selected company and its specific consumer
buying situations. Companys history, products, management, and other significant details are
included in this section. The consumer behaviour and marketing policies are the vital
components of case studies analysis.
Chapter five focuses on the case study analysis, research findings, and interpretation of
results of hypotheses testing. The research objectives would be achieved and the significance
of marketing tools in buying decisions will be analysed in this chapter.

14
Chapter six draws the conclusion and derives the recommendations to the specific analysis of
the selected case study of TESCO.
Chapter seven is the personal reflection to the present research project and focuses on the
researchers learning from the proceedings of this research.

CHAPTER 2
LITERATURE REVIEW

15
The present literature review is focused on the study on the consumer behaviour and its
various aspects, different theories categorises this behaviour in many classes and forms. The
processes involved in offline and online buying at stores is mainly considered in this review.
Perner (2008) described consumer behaviour as a cognitive and perceptive that is used by
individuals or consumer groups to select and/or buy a service or product in order to satisfy
their physical or psychological needs. Presently, consumption frequency and selection played
a key economic factor in organizational and public development; therefore the consumer role
is significant at both macro and micro levels of businesses. This vital importance of the role
of consumers is also because of the amount of wealth and time spend by the modern
consumers at buying offline or online. The buying behaviour become more complex and can
be recognised from the fact that most contemporary consumers spend a great amount of time
and energy on buying behaviour and decision-making activities. Hansen et al. (2004)
recognized consumer behaviour as a process comprised of the activities like information
search, product selection, purchase decision, and consumption of the tangible or intangible
products. This phenomenon has declared it as a complex behaviour which became the
challenge for marketers and policy makers to explore, so that the potential of individual or
business consumer markets.

2.1 Consumer Buying Behaviour

Consumer buying behaviour is based on two major factors termed as external and internal
behaviour factor. The various consumer segments buying patterns are determined by the

16
internal attributes like their demographics, psychographics, behavioural, and life styles. These
factors define the various purchasing characteristics posses by the particular consumer
segments. In contrast, the external factors affecting buying behaviour include macro and
micro environmental determinants like economic and market conditions, advertising and
promotions, customer services, strategic management policies etc. Dawson et al. (2006)
proposed in this respect that the internal consciousness of consumers and external motives are
responsible for a particular buying behaviour.

2.2 Consumer Behaviour Classification

The review of various scholars work presented four distinct classes of consumers on
the bases of their buying patterns. Arnould et al. (2002) recognized these behaviours on the
basis of emotional connection, occurrence frequency, purchase risk, and complexity of
decision making. Kotler et al. (2000) outlined these behaviour patterns as programmed,
limited decision making, extensive decision making, impulse purchasing.

2.2.1

Programmed behaviour:

Habitual purchasing behaviour of low involvement products is included in this group. The
routine purchases of low cost goods like tea, bread, tooth paste, newspapers etc. involves less
search time, fixed vendors, regular frequency of purchases, and little product information
search. Learn Marketing (2008) concluded that this process of repetitive purchases involves
relatively simple decision making and least purchase risk.

2.2.2

Limited decision-making:

This buying behaviour involves medium levels of decision making skills with less
information and search time for purchases. East (1997) suggested that in this mode of

17
purchasing behaviour, information is easily available in little or no time requirements, as the
purchases largely dependent on consumers life style and product preferences. The purchases
of clothes, shoes and other personal accessories choices can be characterized in this form.

2.2.3

Extensive decision-making

In comparison with above two behaviour patterns, an extensive decision making criterion is
related to complex decision making of high involvement (Foxall and Goldsmith, 1994). High
purchase risk is involved with extensive information search and more time requirements.
Peter and Olson (2007) proposed that expensive and less frequent buying decisions of houses,
jewellery, university admissions, and automobiles are included in this behaviour pattern.
Higher levels of financial and psychological constraints are essential elements of these
decisions.

2.2.4

Impulsive Buying Behaviour:

Cobb and Hoyer et al. (1986) defined impulse buying as an unplanned purchase decision
under the influence of external stimuli and inner motives. Ferrell (1998) also proposed that
this behaviour resulted in an instantaneous purchase which has no previous objective. It has
less perceived risk, less time for decision making, and irresistible motivations to close the
purchases instantly. The purchases of fashion goods, perfumes, cosmetics etc. are most of the
time under the influence of surrounding factors and moods. Babin (2001) suggested that the
purchases intentions in mega stores and in shopping malls are triggered by consumers
emotions. These emotions characterized the type of items, quality evaluation, and
significance of purchase by consumers.

18

2.3 Consumers Emotional Involvement

Hansen et al. (2004) suggested that the emotional involvement of consumers is one of the
vital determinants of purchasing behaviour. Chaudhuri (2006) also observed the same
phenomenon in his study that many internal and external factors are responsible for the
evident role of emotions. The research of Laros and Steenkamp et al. (2005) has suggested
another frame work of consumer behaviour models that has its unique significance in
marketing research.
This framework has been developed from the theoretical concepts and research developments
in the field under discussion. The studies of Husman (2000); Ferrell (1998); and Rook and
Gardner (1993) proposed that consumers emotions have a strong influence on the purchasing
behaviour in various scenarios, whether it is planned or unplanned. Motions are also
classified in negative and positive terms, such that the positive emotions contributed to the
moods and affects during the purchase process, and also act as a determinant of decision
making intensity (Watson and Tellegen 1985). Another study performed by Park (2006)
established an affirmative association of optimistic emotions, fashion orientation, and fashion
involvement.
Havlena and Holbrook (1986) recognized that beyond the subjective nature of the emotions,
they are based on the individual perceptions and situational factors. This component has
essential contribution in both planned and unplanned behaviours in purchase process.
Unplanned decisions are normally resulted in impulse buying and greatly affected by the
emotional factor as compared to the planned decisions used inn extensive buying processes.
Planned behaviours are adopted in complex decision situations with ample information and
enough available time. Rationality is contributed more in these extensive buying behaviours
as compared to the emotional inclination.

19

2.4 Conflicts of Approach Avoidance

Normally, the intention of consumer for a buying decision may not actually result in
purchase because no matter how strong is the urge of buying , many external and internal
factors constrained the buying decision. Miller (1944: 431) suggested that consumers
deserted their purchase decisions due to an internal competition between incompatible
responses. The apparent positive and negative attributes of the product under consideration
may generate an inner conflict, which resulted in avoidance of the purchase.
Consumer is motivated either to approach or to avoid a purchase, this concept is very
well explained by Elliot and Thrash (2002, p. 804) as:
in approach motivation, behaviour is instigated or directed by a positive/desirable event or
possibility, whereas in avoidance motivation, behaviour is instigated or directed by a
negative/undesirable event or possibility.
Foxall and Greenley (1999) contributed that this conflict of approach and avoidance can
facilitate in understanding of the consumers thinking patterns. This theory also manages to
estimate the negative consequences affected the purchase decisions. The purchase avoidance
can also be generated due to information overload, indecisiveness, and unpreparedness of
consumers in online or offline purchases. This concept is expressed as overwhelmed or illprepared during the purchasing process and the sheer volume of purchasing decisions to be
made (Otnes et al. 1997, p. 87).
Indecisiveness can also be a result of excess availability products variety and available
choices, especially in mega stores and in shopping malls. Increase in number of shops, and
shopping arenas create confusions also as consumer cannot decide what and from where to
choose. The ever expanding displays of products in big stores increase the trends of window
shopping along with the impulse buying. Harrison, Waite, and Hunter (2006) treated this
concept as a result of overload information, cognitive dissonance, mixed emotions, high risks
of rejection, and inconsistencies in buying behaviours. Priester and Petty (1996) suggested

20
the arousal of positive emotions like joy, cheerfulness, and pleasure due to ever expanding
display of products. These stimuli evoked the consumers to satisfy their urge from
surroundings. Impulse purchases resulted from these positive reinforcements of the lucrative
ambience and store settings. On the other hand, if the cause of arousal remains unexplored,
than these stimuli can create negative impacts also.

2.5 Impact of Retail Environment on Purchases

The environment of store affect as largely on consumer selection of purchase decisions for
products, it can reinforce the positive feelings or effect the selection through provoking
negative emotions of consumer. The store ambience can change the perception of consumers
through the factors like perceived product risk, involvement level of consumer, and the
amount of information available in store. The conflicts of accepting or rejecting a product
generally depend on the internal environment of the store which generates feelings of
approval, pleasure. Joy, and of explores desire.
Atmosphere of retail affects both offline and online channels of consumers purchases
(Donovan et al. 1994). The concepts of stores image create limitations on buying decisions.
The major factor of retail environment can be taken as stimulus of environment on consumer
responses (Mehrabian and Russell 1974). The other important attributes are amount of
information available, time frame of purchases, complexity of physical product arrangements,
and novelty of appearances. Density and distribution of products around the store create sense
of restriction and defines the levels of threat in the store for consumers. Also, the size of the
store and its interior arrangement define the product organization, display attributes, and
available freedom to the consumer (Donovan et al. 1994).
The above mentioned physical environment elements like items location, store size, and
internal ambience can impact positively or negatively on the purchase decisions of the
consumer. One important thing about ambience factors (temperature, music, light etc.) is that

21
they can be noticed only when they reached a negative threshold of consumers psychological
barriers (Mizerski 1982). For instance, change of temperature is noticed only if it is
unbearable for the absorption capacity of consumers body. In contrast, the designing factors
of store (interior decoration, colour, furnishings etc.) noticed when they positively impacted
on consumers perceptions. Stores lay out and purchasing comfort can also increase the
pleasure levels and makes shopping more interesting to the consumer, online purchases also
depends of products layouts and website designs and consumer friendliness (Allan 2008).

2.6 Influence of social factors on consumer behaviour

The atmosphere of buying behaviour also depends on certain social elements like presence of
fellow customers, friends and family members, and the service personnel at the shopping
arena (Baker 1986). Noisy surroundings, busy check out counters, irresponsive sales staff,
and disturbances from friends or family acquaintances can result in provoking negative
emotions and sudden retirement from the purchasing decisions. Cognitive dissonance factors
are also largely dependent of the remarks of reference group includes neighbours, friends and
family members. On the other hand, pleasant behaviour and attractive appearance of the sales
staff at the counters with fast service options include computer assistances, proper customers
queues, and the pleasant surroundings of the store affect positively on the purchase behaviour
with greater inclination of well planned or even impulse buying.
Reference groups are included in the social factors also. According to Escalas and Bettman
(2003, p. 341), reference groups can be defined as social groups that are important to a
consumer and against which he or she compares himself or herself. These reference groups
include influential people and opinion leaders in friends, family, neighbourhood, office
colleagues etc. Who can increase or decrease the volume of impulse purchases (Mattila and
Wirtz 2008).

22

2.7 Influence of Product attributes

The perceived quality of tangible and intangible products can also defines the level of
purchase decisions. Mitchell (1999) proposed that products attributes can define the positive
or negative impacts on purchase decisions. The perceived risks and level of involvement in
the products can make the purchase decisions difficult. The physical performance of the
products, price, durability, and appearance are some factors which determine the level of
perceived risk involved in the purchase, where as the consequences of the products include
brand loyalty, relevance, and seriousness in purchase decision (Mitchell and Hogg 1997).
Planned and extensive buying behaviours required pre purchase information gathering,
careful scrutiny of products, and understanding of inherent needs. As a common perception,
high involvement products are riskier than low involvement; therefore consumers spend more
time and energy in selecting these products.

2.8 Impact of Financial Crisis on Buying Behaviour

The current financial crisis and severe recession in Europe, America, and Far East has
provoked a serious economic challenge. The developed counties are more affected by the
crisis due to having credit economy, which has generated currency and mortgage crisis
especially in UK (Toussaint, 2008). Also, in US, financial crisis is basically due to the bad
credits and poor recovery from the financial institutions, which subsequently generated
mortgage crisis in the country (Toussaint, 2008).
The impact of this crisis on the buying behaviour of consumers is very significant and many
studies have been done to explore the long term impacts on consumerism in developed
societies as a result of this recession (Horta et al., 2008). The drastic impact of the crisis
affected banks and other financial institutions, resulted in bankruptcy of industries and

23
closures of luxurious buying houses. This severe crisis has increased the economical
hardships of both common and business consumers (The Economist, 2008).
Consumers are facing job cuts, un employments, less disposable income, least credit
financing, and high products and services charges (Allen and Gale, 2007) Th retail sector of
UK has also been severely affected from this worst financial crunch, less buying and cost
cutting approaches have been adopted by consumers to meet the challenges of low incomes
(Gramley, 2008). Low consumption trends have been observed accompanied with extensive
search for good quality and cheap products. More inclination of consumers has been
identified in discount options, clearance sales, and leasing options in purchases.

2.9 Impact of technology on buying behaviour

In new millennium, latest information and communication technologies have impacted the
consumers greatly. These technologies are constantly changing the business methods and
organizations structures (Ricard et al 2001). The relationship marketing technologies
facilitate business to establish customers relationship departments, online business
transactions, and effective communication systems. These technologies help companies to
extend their product lines and adopt diversification strategies with efficient services, even
competition forced many organizations to adapt to new technologies (Venkatraman, 1994).
Consumer behaviour also has changed considerably through self service technologies at
shopping malls and other transaction places (Ricard et al 2001). Automated teller machines,
computerised cash counters, bar code detectors etc. Facilitate shopping facilities and
minimize transaction time in busy points of purchases. They enable companies to offer highly
competitive service offerings and customers received a delightful experience during
purchases (Bitner et al., 2000). On the other hand, technology failures and design problems
have created problems to consumers also, system failures case purchase delays or even

24
problems of cash acquirements at ATMs. Taylor and Todd (1995) have identified four
attributes of technology dependence of customers during buying processes; these include
frequency, degree, diversity, and duration of usage. The recent advancements in technology
have driven consumers to become more sophisticated and experimental towards new self
service mechanisms.

25

Chapter III
Research Methodology
This chapter of the thesis report discusses the methodology implemented in this research
assignment. This methodology consists of the research design, research approach, sampling
frame and procedure, data collection methods and description of dependent and independent
variables used in the survey questionnaire with a thorough description on the arithmetical
techniques engaged for data analysis. The present study is based on a descriptive research
structure; information is collected through 60 self administered questionnaires from
consumers visiting shopping malls especially in TESCO.
The present study is mainly based on quantitative investigation with the assistance of
series of theoretical findings in associated academic literature. The appropriate primary data
demonstrations in the form of graphs and tables will also be used. The special concern is
given to the independence of collected data from customers who shared their personal
consumption experiences. The quantitative research instruments used to recognize the
consumption patterns of consumers in recession and the response of mega stores management
to facilitate them in this period of financial crunch.

3.1

Research design

The research design is the blueprint for the data collection, classification, measurement,
analysis, and presentation for a research study. As a result, the research design is an action
based on time based plan which assists in solving the defined problem (Hussey and Hussey,
1997). Furthermore, this design directs the assortment of type and sources of information and

26
describes the association between the dissimilar variables by illustrate a structure and
demarcation the measures.
There exist diverse research designs based on many parameters, such as purpose of research,
data collection, purpose, significance, scope of the research and environment of study
(Saunders et al., 2003). Therefore, on the bases of scope and nature of the issue under
consideration, research can be exploratory, descriptive, and/or of causal nature. Clear
definition of problem and its nature is normally not known in an exploratory study, the
researcher has to design a framework to explore the missing parameters of problem at hand.
The problem has to be clearly defined in the beginning and then the main concepts developed
by exploring the general criteria of the topic. The second approach is causal research design,
deals with the notion of reason. They reveal the cause and consequence association in
between two or more variables. Causal research is very much similar to that of descriptive
study design, but interrelate the variable in a more precise and appropriate ways (Blumberg,
et al., 2005).
In contrast to the above forms of research, descriptive studies display an obvious
organization with precise hypotheses and well defined research problems. Hence, descriptive
researches approximate the scope of a population and disclose associations between the study
variables (Shield et al., 2006). The present research is to be based on the research design of a
descriptive design. In this study, explicit hypotheses have been developed to investigate the
buying behavior of UK consumers in recession. The study has a foundation of precise
hypotheses and extends a relationship between dissimilar variables. More precisely a
relationship need to be established among consumer purchasing behavior and price, type of
goods, and on demographic and socioeconomic variables.

27

3.2 Research Approach

As it was suggested in introduction that positivism will be the most appropriate approach for
this study, therefore it is required to analyse this approach in detail. Positivism is the vision
which facilitates the systematic formation of the culture information (Comte, 1853). This
investigation has been conducted by means of an objective mode, by changing obvious
measures into variables, and by scrutinizing such proceedings from a big population. The
huge remarks composed from respondents can be mathematically analysed to accomplish
comprehensive solutions. The yield of descriptive research can be concerned in managerial
decision making processes (Donaldson, 2003). According to positivism methodology,
quantitative data is composed by using assessment questionnaire as a research tool, and then
it is expansively analysed through arithmetical tools. Another vital aspect of Positivism is the
application of deductive framework. Deduction logic is centred on the concepts present in
related theories and their submission in inferring propositions and/or hypotheses (Easterby,
Smith et al., 2002).
Positivist philosophy which is mainly quantitative in nature and is often referred as scientific
research. It refers to the process of testing which is mainly based on justification of theory. It
considers that knowledge can be based on experience and observation. The key principles
therefore constitute measurement and objectivity which in turn focus on quantitative data
(Pitose, 2007). Hence associated reasoning for this philosophy is deductive (top-down)
approach, which begins with general theory and ends to a specific instance. As the research
continues, step by step it narrows down the research work from a broader picture to a specific
hypothesis, which can be narrowed down further more to conformation of hypothesis by
testing in the market through observation. The result will prove whether the original theory is
proven right or wrong (Trochim, 2006).
In this study, the established theories of consumer behaviour and stores attitudes are used in
confirming the hypotheses in UK context by using deductive approach. Deductive approach

28
adopts top down approach in confirming the collected data with the help of established
theories. As the concepts of consumer behaviour have already been well established in
western organizations, their application will show appropriateness in UK businesses. On the
other hand, inductive approach adopts the bottom up approach. It begins with working on the
data that is being collected based on the observation. As a consequence, it starts from a
specific area of interest and ends to a generalised theory. This approach constitutes a degree
of uncertainty; hence inductive approach is not applicable to this study (Burney, 2008).
Another feature of the study is the assessment of social constructionism. This premise deals
with the fact that the civilization realism is specific to framework used and shows high levels
of assurance on the variety of understanding of consumers in dissimilar economic interactions
at the shopping venues. Therefore, the descriptive approach and the use of quantitative
technique go well with the study.

3.3

Choice of Variables and measurement

The appropriate choice of data variables and their suitable assessment is necessary for the
internal validity of quantitative study (Venkatraman and Grant, 1986). To test the
recommended hypotheses, the study is focused at the conclusion about consumer purchasing
trends in recession. Some important variables used in this study are price sensitivity, brand
loyalty, online service quality, and lifestyle factors. In order to test the suggested hypotheses,
this study is focused on the changes in consumer buying behaviour in post recession period.

3.5 Sample Designing

Sample design has to be finalized before gathering the primary data. In research, sampling is
performed to augment the accurateness of outcomes, raise accessibility of population
essentials, and for a better pace of data-collection phase (Saunders et al., 2003). Therefore,
only few population parameters are chosen to carry out the survey on selected part of

29
population. These parameters included specification of relevant population; sampling frame,
the sampling method, and the sample size have been finalized before conduct of actual
survey.

3.5.1. Applicable sample population

The generalization is possible by the use of suitable sampling method. Probability and nonprobability sampling are two major forms of sampling. The primary data collection for the
present thesis is based on non-probability sampling which is also termed as judgmental
sampling. This method of sampling is a suitable choice in the descriptive context of this
study. The selection of representative sample is necessary to assure the measurement validity,
over presentation of data is possible with overlapping samples. The proposed sampling
technique for this research is stratified random sampling which is used for the random
selection of consumers to analyze their purchasing behaviors.
The applicable sample population is noticeable from the investigation of problem statement,
stated in the start of the chapter. In order to explore the consumption behavior of consumers
in recession, all consumers are member of appropriate sample population (Blumberg, et al.,
2005). British native consumers are selected for the survey along with a group of immigrants
and other ethnic groups living in the metropolitan areas of the country. In present study, the
population consists of all included consumers, who contributed in survey research and
purchase commodities from mega malls (Blumberg, et al., 2005). As the consumer behavior
of British is quite sophisticated and conservative in many aspects due to a rich culture and
tradition, their behavior in recession period will be highly valuable for future researches.

30

3.5.2. Sample Size

The determination of sample size largely dependent of various factors and is based on some
principles. In order to select a representative sample, the variance and standard deviation of
the sample is required. Precision is normally high in when the variance is more within the
population. Furthermore, large samples have many subgroups of interest which can be used
to classify the data of different segments of consumers in present study.
Based on the theoretical model and on the above discussion, the size of sample for
this study is proposed to be consisted of at least 60 respondents, in order to achieve enough
accuracy of measurements. These respondents have been selected on the basis of their
purchases frequency, age, income, and behaviour variance. Youth, females, mothers,
executives, and elderly consumers are constituted the sample. Nevertheless, this sample size
is restricted to the scope of research, cost constraints, and time limitations.

3.6

Data Collection

In order to implement the research design data collection is required. There are two types of
data exist which are defined as following.
Secondary data is data provided to a researcher through former studies done by other
researchers for other research objectives. In this study, secondary literature is widely used in
order to review the existing research in the respective field and to build the conceptual model
as well as developing the hypotheses.
Secondary data is collected in this study through extensive literature review,
comprised of vital aspects of theoretical framework. Previous research studies have used to
describe their significant contribution in development of consumer buying behaviours. This
review provides a complete picture of the technological, human, cultural and organizational
perspectives of the consumer behaviour in recession. These scholarly journal articles,
researches, online sources, and books provided the background of this study and facilitated

31
the survey questionnaire formation. It shows the general information perspectives, cannot use
as a primary information source, but it affects the parameters of primary information
collection.
On the other hand, primary data is the new type of data researchers need to collect in order to
study an explicit ground of concentration. In this study, primary data is collected via self
administered questionnaires with consumers. This data collection serves to relate the selected
variables to assess consumer purchasing behavior and to provide first hand knowledge into
this particular area of research.
According to positivist approach, the data collection in present study has been done thorough
a questionnaire survey. The information about the variables already described is collected
through number of questions in the survey. Rosnow and Rosenthal (1996) proposed that in
the collection of quantitative data, generalisation should be ensured through various groups of
settings, times, persons etc. The survey has been administered in about 60 consumers living
in cosmopolitan regions of UK, working full-time or part time in local and multinational
organizations and includes non working house wives also. A special case of the TESCO chain
of stores is used as a main venue of survey conduct. Also, TESCO has been selected as it
comprises of large number of stores chains in all cities of UK, and being the market leader for
many years. This stratified sampling will generate the desired representation of sample, and
will permit better measurement validity.
In the present situation, each respondent was interrogated for about 20 minutes in a separate
place after the completion of their grocery purchases. The interviewer explained the nature
and scope of research and took the consent of consumer to participate in the research.
Interviewer also gave 15 minutes time to consumer before start of survey to fully relax from
the hassle of shopping and top concentrate on the questions. The responses were recorded on
the questionnaire by using a black pen. Each interview comprised of about 20-30 minutes, in

32
which interviewer had focused on collecting accurate information for each structured
question. The pattern of survey was formal but casual conversation was also used to guide the
respondents and provide them friendly environment.
Collected responses from survey have been documented to record those in simple way on
excel spread sheets. Through the method of structured questionnaire there is a possibility of
collection of different opinions producing an in-depth and non biased comparison. The
biasness in responses has been minimized by using personal survey technique. The
anonymity of respondents was assured to gather accurate responses.

3.7 Triangulation of study

In order to increase the credibility and authenticity of the data, various ways of data
collection are used to achieve the triangulation of research. This triangulation includes
achievement of validity, reliability and transferability of data. According to Patton (2001),
triangulation functions to strengthens a study by combining methods, this can mean using
several kinds of methods or data, including using both quantitative and qualitative
approaches (p. 247).
The first angle of present research is reliability which can be fulfilled by the inner uniformity
of the responses and accuracy of respondents. Joppe (2000) explains reliability as, the extent
to which results are consistent over time and an accurate representation of the total population
under study is referred to as reliability (1). Proper collection of responses and careful
explanations of questions have increased the reliability of the collected data.
The validity of a survey is the degree to which variations in responses reveal disparities in the
calculated attribute. Joppe (2000: p.1) explained validity as: Validity determines whether the
research truly measures that which it was intended to measure or how truthful the research
results are... In this research construct validity has been assured by using grounded theory

33
in question formation and content validity is assured by appropriate sample selection and
proper survey procedure.
The last measure of triangulation in this research is transferability. It explains as the extent
to which the outcomes of quantitative investigation can be generalized in other frameworks.
Transferability is the extent to which the present study can be generalized; in this case the
transferability can be achieved if the same study can extend to larger population of UK
consumers in diverse shopping locations.
The present study accomplished reliability and validity by the application of many
approaches. Firstly, research variables are clearly outlined with greater transparency and
internal consistency. Secondly, a contextual framework has been used by the help of already
established theories to assure the external validity for the research. Finally, reliability and
credibility has also been achieved by discussions with academic specialists in context of
consumer behaviour. Key research themes have been addressed and used by the researcher in
this study extensively.

3.4

Data Analysis Methods

In this study, collected data has been analysed by using simple mathematical procedures
provided in Microsoft Excel. Various mathematical tools are suited for the purpose of the
detailed quantitative analysis. Data analysis included generation of data comparison tables,
percentage analysis, mean, graphs, and charts. Findings of the conducted research have been
analysed by categorization, classification and analysis of data (Yin 1994).
The numeric tool to be used in the present study is explained below:
The simple percentages are used to analyse the demographics of target population. The trends
in the sample and the weight ages of various factors like age, sex, marital status, experience,
and qualification will be calculated in percentages. These percentages will be helpful in

34
analysis and interpretation of data collected from respondents.
The formula used in simple percentage analysis is as follows:
Simple Percentage = (Actual value or number/ total value or number) x 100

3.8. Questionnaire Designing

A questionnaire is defined as a controlled succession of inquiries considered to depict facts
and estimation and that supply a medium for saving data. These questionnaires accomplish
four rationales. The primary and main role is strained precise information from respondents.
Secondly, they supply prearranged discussion in a uniform and systematic way, where
questions are identical to every respondent. Thirdly, questionnaire is designed to provide a
norm on which facts, observations, and approaches can be written down. Finally, these
questionnaires make possible the data processing. Responses are documented in a general
place to record them in simple way.
The management of the questionnaire can be completed throughout focus group discussion,
personal face to face individual interview or in depth phone meeting. In addition, questions
can be open or closed in any type of questionnaire. A closed question is the one which has
predetermined options or indicators, where as open questions do not compel the respondent to
decide among options (Saunders, Lewis & Thornhill, 2003). In this thesis, conduct of a
structured questionnaire is decided with closed questions that will administer in face to face
interviews with customers.
The questionnaires used in this study are designed on the base of prior researches and
theoretical framework.

The theory and scholastic approaches found in prior consumer

behaviour researches used to list important factors and variables Buhalis et al, (2000). The
vital attributes of consumers buying behaviour and choices during purchase process are
important foundations of questionnaire designed for this research.

35

3.5

Ethical issues

Even though ethical concerns in descriptive research are not as serious as in qualitative
exploratory research, the minor concerns cannot be over looked in the present study. The
administration of the organizations used in survey research is properly informed about the
nature and goals of the research, questionnaire contents, and assurance of the secrecy of
company information. A proper cover letter is to be written to the concerned authorities
explaining the anonymity of respondents identities, confidentiality of data, surety of the use
of organizational information solely for academic purposes, and the process of dissemination
of analysis results.
The questionnaire has been designed to ensure maximum response rate, to avoid content
validity issues, and to facilitate the mathematical problems in analysing the data. A funnel
design is used by asking more general questions in the beginning, such as consumers
demographics, gender, age, nature of job etc. This personal information is followed by more
specific questions relating to the research hypotheses. Care has been assured in paraphrasing
the questions such that no ambiguity might be generated. No leading, threatening, double
barrelled, lengthy, or/and ambiguous questions are included in the questionnaire.

3.7

Data Analysis

Scores from the three scales will be analysed separately to see if there significant differences
and correlation. Some scholars suggest the analysis of the data is divided into four steps:
(Leedy and Ormrod: 2005 p136) - (1) CategorisingFinding some common themes, (2)
Unitising- The date gathered can be allocated and coding to some different schemes, (3)
Identifying themes and patterns, and (4) Interpreting the issues.
The analysis of data can be done using mathematical procedures suitable for quantitative data
analysis. The data collected on important variables first need to be tested for percentage
analysis, some statistical measures such as mean, median etc can also be used to determine

36
data descriptive. The results will be used to test the hypotheses and to discuss the results in
relation to previous theory.

3.7 Limitations of the study

Although wide range of credible, authentic, and latest academic print and online resources
are used for collection of appropriate literature, but this references list is not exclusive and
many resources are not used in it due to time and accessibility constraints. The present thesis
is prepared through a meticulous literature focal point, which could differ on the basis of used
literature sources.
Another restraint of this study the limitations of specific contextual individuality of literature,
which has generated a degree of subjectivity in the choice of appropriate scholarly sources
(Bell, 2005).
In the end, this research assignment is completely reliant on university guidelines. A part
from regular academic guidance and tutors support, academic information richness, and the
learning environment, this thesis has managed nearly all research criteria of the university.
This has generated many research constraints of time limitations, research approaches and
choice of resources.

Summary
In this research methodology, the application of Positivism research philosophy is the most
suitable approach selected in the present study of consumers living in UK.

Though,

exploratory research strategy through literature review and grounded theory is adopted to
determine the hypotheses, the primary data will be collected and analysed through descriptive
approach. Graphs, charts, and tables will be used to present the findings of the study.

37

Chapter IV
Company Analysis
This chapter covers latest trends of consumer behaviour in UK during recession. The
motives behind recent purchases of consumers are also discussed in detail to understand the
background of present study. A brief company overview and strategic analysis of Tesco is
also included in this chapter to analyse the current situation of the company.

4.1 Financial crisis in UK

Present financial crisis, started in early 2008, resulted in an economic recession in UK and
other European countries. This downturn can be treated as a key challenge for the
productivity and even endurance of large number of UK based and other global companies.
The recession has spread globally and caused turbulence in a broad array of influential
markets. According to Welle (2008), a large number of countries are perceived to be on the
edge of depression by now pushed in it.
As this dissertation is particularly assessing the impacts of financial crisis on buying
behaviour of UK consumers, it has been recognised from the survey that some of recent and
future challenges can be divided in to direct and indirect challenges. The challenges posed by
direct factors include disposable income decrease, insecurity of jobs, and hurdles in credit

38
financing (Welle 2008). The indirect challenges are faced by the organizations to produce
economical products with credit financing facilities in order to attract the deprived customers
again for purchasing (Economist 2008).
The main research question of the present study is to evaluate most common consumer
buying behaviours in this period of recession in UK, the research is outlined on this
parameter and specific attributes of consumer perceptions have been identified in this
research.Though, the signs of recovery have been observed in global economy, 2010 is still
the recovery period for UK economy. The main reason is the prevailing downturn of UK
economy which has raised the unemployment and decreased the disposable income of UK
consumers (Datamonitor 2010). Similarly, companies in retail industry have increased their
lucrative offers, online sales, low cost food products and discount coupons have become the
latest trends in retail industry of UK.
The present recession has affected retail industry of Britain very badly in 2008 and 2009.
According to Euromonitor (2010), The GDP of UK fell by about 5% in 2009 with a reported
rise in inflation was 2.2%. Also, the unemployment rate has grown at the rate of 7.7%,
approximately 2% higher than that of figures in 2008. Another impact has been seen on the
decrease in value of currency, British Pound became almost equivalent to Euro in 2009.

Fig 4.1: UK Spending on Food as % of Overall Consumer Spending 2004 to 2008

39

Source: Euromonitor (2010)

The economic downturn has been brought to light with the assistance of the following GDP
growth graph since 1989 (Mintel, 2009) in fig. 4.2. The financial slump in the UK that
happening from middle of 2008 has affected on spending manners and retail expenses with
insightful allegations for UK retail sector. Many large retailers like Woolworths have closed
down , and empty retail stores was a common sight in cities and towns in this period. The
other retails have faced a decrease in consumer assurance and purchasing power. Retail sector
is extremely significant in UK economy, the superstore chains alone accounting for more than
10% of GDP and contain over 11% of the labor.
Fig 4.2: UK GDP Growth 1989-2009

Source: Euromonitor (2010)

40

4.2 Tesco-Company Overview

Tesco, headquartered in Hertfordshire, is the largest retailer of UK with a work force
of over 472,000 employees and a revenue of 54 billion announced in 2009. They have
established in 1919, from a store in Edgeware, London. According to Datamonitor (2010),
their global operation spread in 14 countries with 4331 mega retail stores, which sell from
food to house furnishings. The online retailing services are also provided to consumers
through Tesco Direct and tesco.com.

Tesco Personal Finance is the service providing

broadband online connections and financial services.

The relative positioning of Tescos market share is largest as compared to other
leading stores chains in the UK retail market. See figure 4.1

Fig 4.3: Market share of leading food stores in UK Market

Source: Euromonitor (2010)

4.3

Tescos PESTLE Analysis

The PESTEL framework identifies the vital macro environment force that shapes the

dynamics of Tescos operations.

41

4.3.1

Political

New framework of WTO and entrance of China in open tariff policy had opened new venues
for Tesco in international operations. It has signed agreements in 2009 to open mega malls
and hypermarkets in China (Straits Times, 2010). Another vital element in global expansion
of Tesco is governments promotion of liberated trading blocs in every part of the world
(Lynch, 2003). The strong position of Euro and expansion of European Union also played a
major part in expansion of Tescos retail network across Europe.

4.3.2

Economic

The major economic factors for Tesco in UK was recession since 2008, but decrease in
interest rates by UK government has helped huge organizations to facilitate new capital
expenditures, it also slows down increase in unemployment in 2010 (Euromonitor 2010).
Also, the spending power of UK consumers is on the steady rise now, and positive trends are
observed in buying behaviour. There is still a certain level of financial uncertainty, which
holds the consumer to avoid spending on luxury goods (Keynote, 2010). According to
Guardian (2010), retail stores like Tesco are benefitted from the preference of customers to
prepared meals at home rather than eating out. The spending on grocery shopping has been
shown a steady rise irrespective of the financial constraints in 2010.

4.3.3

Social

The main trends in social contexts of UK are ageing population, health conscious new
generation, and infusion of immigrants. The ageing population is a challenge for food
retailers as their food consumption is less. Also, they avoid travelling to supermarkets due to
their age, home deliveries in small amounts is valid strategy of Tesco for these types of
consumers. Another important trend is health consciousness and preference of organic foods
in young population. Tesco has accommodated this need through new assortments of organic
foods. The inflow of immigrants in UK has created new demands of Asian and African

42
oriental food; Tesco needs to meet this challenge of importing food items and groceries for
this increasing population of immigrants in UK.

4.3.4

Technological

Technology has a great impact on supply chain, processes and operations of Tesco. Online
grocery retailing is the new section added in services by making the effective use of internet
technology. Loyalty cards, and online subscription programs are successful due the latest
information technology, they keep the customer away from switching the grocery store (Sun
2009). Tesco is also using mobile technology to keep in touch with large customer data base,
the new Wine App developed in Tesco to facilitate the purchase of wine through mobile
phones only (Tomlinson & Evans, 2010).

4.3.5 Legal
High percentage of VAT (value added tax) would affect the non food section like clothing and
furnishing of Tesco. Also, the increase in minimum wage rate buy 15.5% by the new
government would in crease the operating costs of Tesco.

Globally, the changes in

governments and strict monetary policies in America and Asia will affect on the world wide
operations of Tesco in general.

4.3.6

Environmental

The rise in demand of environmental friendly, degradable and reduced packaging has made
Tesco to cut down plastic bags and to introduce reusable bags. It has increased the social
responsibility corporate image of Tesco. Another mile stone is the addition of carbon foot
printing in the displayed products like potatoes, dairy and on juices (Wood 2009). Greener
Living Scheme by Tesco gives advice to consumers on major environmental issues like
proper waste management, and reduction of carbon foot printing (Yuthas 2009).

43

4.4 Tescos SWOT Analysis

In order to understand the affects of recession on Tesco, a brief SWOT analysis is presented
here.

4.4.1

Strengths

According to Datamonitor (2010), Tesco is third largest grocery retail chain globally,
with highest share of 30.7% in UK retail sector.

Tesco has shown a steady strong financial performance over many decades as a result
of effective strategic policies, the turn over is 54billion has shown a boost of 14.9% as
compared to the last year figures.

High level of customization in services and products match the latest needs of
consumers of digital age.

High customer retention through its loyalty cards Tesco Clubcard, enabled the
organization to collect enormous amount of customer data, which is well utilized in
promotion and advertising like direct marketing.
The performance of Tesco in last decade can be shown in the following key growth indicators
(Fame 2010):

44
Fig

4.4:

4.4.2

Tesco

Yearly

Growth

in

Key

Performance

Indicators

Weaknesses

The performance of Tesco was not competitive in last year 2009-2010; the recalled products
in 2009 have drastically impacted the sales and brand image of the company (Mintel 2010).
Another important weakness was the concentration UK retail sector as compared to other
global destinations, 75% of revenues was earned fro UK retail in 2009 (Tesco 2010).
The lack of diversification and global expansion strategies have drastically impacted Tesco in
international market and made it more prone to systemic risks of UK retail market.

4.4.3

Opportunities

New opportunities are available for geographic diversification of Tesco in markets of

Asia and Africa. Popularity of online grocer retailing and financial support services in Tescos

45
customers is opening new business opportunities. (Guardian, 2010), also reduced the
operating cost for the company.
Rise in global expansion to China and India will improve the world ranking of Tesco,
and the food crisis in developing countries increases the chance of exports in these countries.
Tesco can expand the in store brands, and overseas export of food items to gain new markets
in Asia and Africa.

4.4.4

Threats

The contraction of UK economy and decrease in consumers purchasing powers are

bigger threats for the company. The concentration of Tesco in only UK market can raise
further financial constraints to the company.
The discretionary buying behaviour of consumers is also affected from fall in
disposable income and raises in unemployment, therefore the sale of non-food items and
luxury products have seen a decline in past three years.
Increase in competition in UK retail market and influx of new retailers have changed
the market share of Tesco in recent years. It can affect the sales in future also. The close
competitor of Tesco in price leadership is ASDA; the profitability margins are decreased in
the market as Sainsbury and Morrison also striving to maintain low prices.
As financial constraints have declined the incomes in developing Asian and African
countries, therefore the overseas expansion of Tesco in the countries like China and Japan
would face failure in their business strategies and strong competitors actions. Tesco requires
huge marketing and large investments to enter in new markets with a ne brand name. Low
disposable income in under developing countries is also a threat for the sales volume targets
of Tesco in overseas operation.

46

4.5 Competitive Strategies

Consumer focus and realization of their needs is the prime goals of Tesco, this
understanding and proactive consumer schemes have given an edge to the company over its
competitors. Online grocery markets are expanding due to the busy life styles of consumers,
have created new opportunities to the company to expand more in online consumers markets.
Tesco always tried to expand its market share in new potential shopping areas globally, but
still facing many challenges in local and overseas operations. The strategies used by the
company to meet these challenges are listed as follows:

Expansion of new online ventures to expand UK and overseas shopping markets. Cost
saving, less investment, and time saving are main advantages of this form of purchases.
Tesco.com is providing online grocery shopping facilities to the consumers and becoming a
leading grocery supplier to online consumers in UK. Market efficiency is increased by
reduction of labor and transaction costs.

Decline of profit margins in food products pressurized the company to increase the product
range in non food market like home products, technical gadgets, and financial services. Tesco
Direct is the division of company which deals with management of these divisions. More
than 8000 products are available online through Tesco Direct ( tesco.com 2010)

Membership cards and loyalty programs offers on Tesco website increase the values of
business in regular consumers.

Strong supply chain management in food items is a competitive feature for the company, but
establishing the same level of supply chain in non food items is a real challenge for the
company.

Unique offers, flexibility, and adaptation to the local culture are main challenges faced by
Tesco in overseas markets. Adjustments with consumer purchasing powers and their

47
expectations also pose great tasks for the company management in China, Japan, Korea, and
other Asian countries. Another key element in overseas markets is establishing the new brand
names in consumer minds in presence of their strong local store brands.

4.6 Criticism in domestic business

A part from all above explained achievements, Tesco has been faced allegations and
criticism in the UK markets. Some of the major issues included:

The allegations of boiling competition in local markets due to the immature Land Bank
(Islam 2006).

Criticism on non consideration of needs and wants of local communities in development of

new stores in convenience sector.

The cases of failures in delivering supplies in online transactions like case of failure
delivering goods in Sussex university campus in 2007, generated backlash when Tesco
refused to offer apology or refund.

The Grocer (2006) has done a research on superstore checkout, found that Tesco has slowest
checkout among six major competitors with Somerfield had the fastest check out queues. The
same research had nominated ASDA as the cheapest super market chin in UK, Tesco received
the second status in low prices.

Tesco has always been criticized on fat expansion and market dominance by journalists and
consumer groups (Mirror 2008). For instance, the residents of Hall green in Birmingham
have raised a strong protest against the opening of new Tesco store in their locality as the
local business found it a threat to their survival. Though, Tesco got permission of opening up

48
the store in 2008 but local residents have boycott the store and the store deliveries have
created major traffic problems in suburbs. In the same year, company has faced opposition on
expansion of its stores in Coventry (Coventry Telegraph 2008).

A famous campaign No Mill Road Tesco against Tesco had been run by Cambridge
residents to protect famous Mill Road from crowding and traffic issues. The city council had
supported the residents verdict and Tesco ended up in a small store with no alcohol license or
external refrigeration facilities (Cambridge Evening News 2009).

Criticism in Overseas business

Tesco had faced severe criticism in overseas operations in especially USA and in Thailand
regions. Some of he major incidents of criticism are discussed below.

In US, Tesco and other European concerns have faced a severe scrutiny and allegations fro
Human rights Watchdog. The main allegation was about not approving workers union in
Tesco Fresh and Easy store chains of USA, regard less of the local laws of labor rights. The
workers faced immediate firing in case of union formation (Thompson 2009).

The start of Tesco Lotus operations in Thailand in 1998 had received a severe criticism from
local residents and competitors. The regular violent threats from local protesters have made
the job of workers very difficult in these stores (Evans 2008). The grenade attacks, gun fires,
and rocket attacks have targeted lotus stores by local groups. The local oriental culture had
not accepted a foreign intruder against their local businesses. The legal offence and journalist
encounters by the company were the attempts to restore integrity of the organization in
Thailand. These attempts were strongly condemned by the local groups as the corporate
culture was against their local deep rooted businesses culture. The local politicians in
Thailand also supported the protestors and threatened company officials.

49

Despite the open door policies of local governments in developing Asian and African
countries, Tesco have always faced the protests from local competitors and consumer groups.
Continuous struggle with image building marketing efforts, huge charities and corporate
social responsibility causes in local communities have done by the company to reduce
misinformation and criticism.

Severe criticism have also been raised against the Steering Wheel policies of Tesco,
strict work rules and rigid policies are the main claims against the HR procedures of
the company in overseas operations. For instance, company had denied to pay medical
for the first three days of sick leave have decreased absenteeism but has invited huge
criticism also.

Conclusion
In view of above analysis of Tesco, it is concluded that The Company has top position
in UK retail market and third position in global retail sector. In this period of recession, the
retail market is highly turbulent and variable as per change in the consumer perception. Tesco
has been achieved its market leadership in UK but has to introduced more global
diversification and competitiveness to meet new political, economic, and environmental
challenges. The company has faced strong criticism in local and foreign operations, and
required to adopt sustainable policies to meet these allegations tactfully. The recent strategy
to meet with the changed needs of financially deprived customers has shown the agility and
proactive attitude of Tesco.

CHAPTER V

50

Research Findings & Data

Analysis
5.1 Data collection Analysis
The triangulation of this study demands collection of both qualitative and quantitative
data. Qualitative data is the secondary data collected in the previous chapter about the
consumer behaviour in recession and company analysis of Tesco. This data is collected from
reliable online sources and research reports of credible agencies. In this chapter, the
quantitative data collected from selected consumers will be discussed. The buying behaviour
of UK consumers is judged by using survey questionnaires in shopping malls and super
markets.
The basis of sample selection was suitability of target respondents in this study. In
order to maintain the time and resources constraints, questionnaires were distributed in
shopping malls at Tesco, Sainsbury, and Asda. The regular consumers have been interviewed
in person with the help of structured survey instrument. The questionnaires were distributed
to personal references and through e-mail also.
There were 60 questionnaires distributed personally and through email. 40 forms were
returned dully filled by consumers; response rate of this survey was about 66%, which is a
good response rate in view of the limited resources and time. Out of these 40 respondents, 18
were females and 22 were males, i.e. a gender ratio of about 45:55 is obtained in females and
male respondents in this survey. The age range of respondents lies between 18 years to 60
years, but majority respondents lie in the age bracket of 20 years to 35 years on average.
Most of the forms were self administered and consumers filled them in front of the
researcher, but some are filled by the online respondents and were collected through e-mail.

51
Over all behaviour of respondents was cooperative and positive; they took personal
interest in answering all the included questions. During the survey, different questions were
asked to further elaborate some questions. They were properly briefed by the researcher about
the nature and scope of the research, and took their consent of voluntarily participating in the
conducted research. The questions and their background were also properly explained before
the start of response collection. The anonymities of participants were confirmed and they
were assured that results and findings of this research would purely be used for academic
purposes.
The results of this investigation are discussed in detail below:

5.2 Major premises of study

During the self administered survey, there are number of themes of the present study
are revealed. There were three essential challenges recognised by the respondents in the
detailed survey. The challenges associated with the purchasing behaviour of UK consumers in
this period of recession include key issues faced by these people in daily life. The key
themes identified in this study are job uncertainty and high unemployment, decreased
disposable income and purchasing powers, and low levels of family savings. Respondents
have identified these challenges to be the cause of their changed buying behaviour in last two
years, but the positive side is that UK economy is recovering and consumers feel a better
financial condition and more opportunities in last six months.
Another important consideration of the survey was to identify recent trends in
consumers which can help Tesco and other mega retailers to change its strategies according to
the consumer needs. Though the figure of interviewed consumers is very small, and does not
represent statistical importance in large population of UK, but proved valuable for the
researcher to identify and explain the key trends of consumer behaviour.

52

5.3 Consumer Buying Trends

The revealed challenges to buying behaviour quoted in the last section have been a
tremendous impact on consumer buying behaviour in recession. The previous behaviour of
UK consumers in booming economy was inclined towards premium buying, dining out,
leisure purchases and high saving rates. Now this great change in buying behaviour is caused
by the market forces bankruptcy, closure of organizations, loss of job, and financial insecurity
caused by worse economic scenarios of UK and other European countries.
The blend of 'job uncertainty', decreased disposable income and purchasing powers ' and
low levels of family savings ' increased consumer concentration on discount and coupon
purchases, availing sale schemes, stores incentive programs, and reduction of waste in their
house holds. The amount of purchases also declined in recent year as bulk buying options are
less opt by these consumers
This study also reveals that prior purchase planning has become an essential habit of
consumers to avoid unnecessary purchases. Impulse buying has also shrunk as mentally the
consumers are more pressured and stressed, therefore consumers discussed that this
behaviour is not prevailing so significantly as compared to the past when their disposable
incomes were high.

5.4 Data Analysis and Findings

In this section, the questionnaire is discussed in detail to show the findings in each
question. These findings are related to many aspects of the consumer behaviour and possible
alternatives used by these consumers to match their needs and available resources.

53

5.4.1 Criteria of Selection of Shopping Place

In this question, respondents were asked to identify the criteria they used to select a
shopping mall. A mixed response has been obtained with no major emphasis of any criteria.
Respondents were allowed to choose at the maximum five attributes of their preference. The
major criteria identified by participants were Store loyalty cards and schemes (13%), large
selection of products/brands (11%), store timings (11%), and location of retailer (11%). The
rest were the general attributes that gained less concentration of consumers.
This response is shown in table 5.4.1; it indicates that the recent trend in consumers
favored store loyalty and brand recognition to gain long term advantages from a particular
chain of stores. Variety seeking is no more prevailed as a major behavior in store selection.
The other major trends emphasize the consumers focus of products quality, availability, and
variety in a particular shopping arena. The convenience buying is also a main perception as
the location of store is preferred near to the house to save transportation charges and time.
This factor leads the retailers to expand their market coverage if they want to increase their
market share.

Table 5.4.1 Criteria of Selection of Shopping Place

Options
aHighest quality
bStore promotions
clow prices
dStore loyalty cards and schemes
elocation of retailer
fconvenience
gstore timings
hstore organization
iavailability of recycling facilities
jlarge selection of products/brands

No. of Respondent
11
9
12
17
15
13
14
4
3
15

Percentage
8%
7%
9%
13%
11%
10%
11%
3%
2%
11%

54
klm-

availability of public transport

online ordering/delivery scheme
availability of cash machines

Total

6
9
4

5%
7%
3%

132

100%

The graphical interpretation of above findings are illustrated in following fig.5.4.1

Fig. 5.4.1 Criteria of Selection of Shopping Place

Which
Qualities are importantStore
for you
while deciding about the
Place
Highest
quality
promotions
low
pricesfor Shopping?
Store loyaltycards and schemes
store timings
large selection of products/brnads
availability of cash machines

location of retailer
5% 7% 3% 8%
7%
11%
store
organization
9%
2%
3%
13%
availability of public
transport
11%
11%
10%

convenience
availability of recycling facilities
online ordering/delivery scheme

5.4.2 Average weekly spending on grocery shopping

The response of the question about average weekly spending on groceries has indicated the
trend of consumer spending on household. One of the major affect of recession is the
decrease in spending on households and other accessories. If the responses in this study are
evaluated, results show that 23% consumers are spending GBP 20-39 per week on groceries,
this figure is on the lower side of the spending scale. It shows the less income levels and
financial insecurity of consumers after two years of the start of recession. On the other hand,
only 10% respondents spend GBP 80 or more per week, this shows minimum level of
incomes of large population.
Another important finding in this question was high percentage of missing values (23%),
which indicates two possibilities that either these consumers have no fixed weekly spending

55
as their sources of incomes are not fixed or these consumers never keep a record of their
purchases and do shopping without any planning. Non interest of consumers in this question
can also be the cause of missing values.

Table 5.4.2 Average weekly spending on grocery shopping

Options
aLess than 20
b20-39
c40-59
d60-79
e>80
fMissing
Total

No. of Respondent
7
9
7
4
4
9
40

Percentage
18%
23%
18%
10%
10%
23%
100%

The graphical interpretation of above findings are illustrated in following fig.5.4.2

Fig. 5.4.2 Average weekly spending on grocery shopping

How many pounds on average do spend on Weekly grocery?

30%
20%
10%
% of Respond

0%

18%

23%

23%

18%

No.of Respondent

10%

10%

56

5.4.3 Preference of a grocery chain

Table 5.4.3 shows the findings of the question about visit frequency for a particular grocery
store chain. Participants have asked to nominate three stores at the maximum where they
normally visit in a week. These responses can identify the popularity of major retail stores of
UK among consumers in recession. The results of this question show that maximum
consumers (44%) preferred Tesco in their regular visits. They shared the reasons of this high
frequency of visits as their trust on available products at the store and availability of large
number of Tesco outlets in their neighbourhood. These customers have Tescos Club card
which help them in payments of regular purchases and availing of multiple discount offers at
Tesco. Sainsbury gained the second rank (21%), and Asda received third preference (19%) in
this ranking from respondents.
The percentage other grocery stores is very low, shows a trend of consumer
preference of old, large, and established chains as they have stable and very widespread
supply chain networks with better customer care services. Consumers also prefer in house
brands of large chains like Tesco whose 75% revenue generated from UK market. Another
important concern for Tesco is good competitive position of Sainsbury and Asda, which
would be a great challenge in future if Tesco does not consider this competition. The missing
values for this question arise due to those respondents who do not have any preference of any
particular store chain; they randomly buy their groceries from multiple outlets.

Table 5.4.2 Preference of a grocery chain

57
Options
a- Asda
b

No. of Respondent
12

Percentage
19%

- Cooperative
c- Lidl
d

1
4

2%
6%

- Morrisons
e- Sainsbury
f- Tesco
g

3
13
28

5%
21%
44%

- Waitrose
Total

2
63

3%
100%

The graphical interpretation of above findings are illustrated in following fig.5.4.2

Fig. 5.4.3 Preference of a grocery chain

Which Grocery Chain do you normally Visit in a Week?

3%

Asda

Coperat ive

Lidl

19%

Morrisons

44%

2%
Sainsbury
6%

T esco

Waitrose

5%
21%

5.4.4 Consumers experience of Purchasing

The question about involvement in buying of clothes, gifts, and other household items related
to the experience and participation of the particular respondent in buying process. If the
respondent is not a frequent buyer then he/she cannot predict the future inclination or could
explain the past problems of buying process in recession period.

58
The response of this question revealed that about 33% respondents participating in at least
50% buying of the above items, 23% are responsible for buying all items for their house hold,
and about 18% are involved in more than 50% buying of these items. This response has
shown the validity of the sample to facilitate the prediction of consumer behaviour in UK
consumers. 28% missing values indicate that a considerable percentage of respondents did
not want to share the information or they were not sure about the purchasing behaviour of
their family which could be multiple that every family member participated in the buying
process.

Table 5.4.4 Consumers experience of Purchasing

Options
No. of Respondent
Percentage
aNearly all
9
23%
bat least 50%
13
33%
cGreater than 50%
7
18%
dMissing
11
28%
Total
40
100%
The graphical interpretation of above findings are illustrated in following fig.5.4.4
Fig. 5.4.4 Consumers experience of Purchasing
What % of Clothing, gift, Other Shopping do you do for Your Household?

28%
Nearly all

atleast 50%

18%

23%
Greater than 50%

Missing

33%

5.4.5 Change in Consumer Saving Pattern

This question is related to an important measure of financial stability of consumers in
recession i.e. the decrease in disposable income or decline in saving amounts. The indicators

59
of UK economy discussed in chapter 4 have shown a recovery in the last six months of 2010;
this trend has been shown in consumer responses in this study also. 23% participants
succeeded in saving more amounts this year i.e. they are in better financial condition, where
as 33% have felt no change in the saving pattern or their income and expenses are not
changed in the current year. Only 18% have reported a decline in saving pattern as they are
still not able to come out of the financial depression of the last two years. Though the saving
patterns show a positive trend and stability, the consumers in UK are still cautious and are not
willing to increase their spending on luxury and premium products in near future.
28% missing values in this question again show the unstable consumer behaviour of a large
segment of population that they have no fixed pattern of saving or expenditure. Some
respondents have discussed that their income is not constant through out the year, therefore
they cannot decide about the frequency and amount saved in a particular period. Also, high
rates of unemployment and increased inflation are still the major challenges for government
and consumers in 2010. The coming year is expected to show better saving patterns due to
decreased interest rates by government and increase in economic activity in UK. Table 5.4.5
below shows the findings of this question.

Table 5.4.5 Change in Consumer Saving Pattern

Options
No. of Respondent
a- More saving in this year
9
b- Less saving in this year
7
c- No change in saving amount
13
d- Missing
11

Percentage
23%
18%
33%
28%

60
Total

40

100%

The graphical interpretation of above findings are illustrated in following fig.5.4.5

Fig. 5.4.5 Change in Consumer Saving Pattern
In 2010, Did You alter your saving Behavior?

23%

28%

More saving in this year

Less saving in this year

No change in saving amount

18%

Missing

33%

5.4.6 Change in Shopping Habits

Another important measure of the intensity of depression in a country is the change in
shopping habits of consumers. The question asked from the respondents in this area was to
indicate the changes in various shopping habits in their daily purchases. The responses have
shown a visible decline in visits to luxury and specialty stores, this trend either remains
constant or declined for these respondents. Very few reported the increase in this behaviour.
The possible reasons of this trend are lack in disposable income, jobs insecurity, and financial
instability of large sector of population in UK. Though the recovery signs are clear but
consumers are still very conscious and try to avoid unnecessary and premium purchases.
On the other hand, a visible increase has been observed in visits to discount stores and to
departmental stores where customers can be assured of low prices and good value for their
money. This trend supports our assumption of recession ridden consumers that they spend
money very wisely now to save more and to get good quality. This assumption is also

61
supported by the response of large decrease in shopping trips, this trend has decreased the
options of impulse buying and window shopping that tempt unnecessary buying in prosperity.
Table 5.4.6 Change in Shopping Habits
Options
a- No of shopping trips
b

Less
10

More
5

Same
9

- Visit to discount stores

c- Visit to luxury stores
d

6
9

11
8

8
8

- Visit to departmental stores

e- Visit to specialty stores
Total

5
7
37

11
6
41

9
9
43

The graphical interpretation of above findings are illustrated in following fig.5.4.6

Fig. 5.4.6 Change in Shopping Habits
In Past 6 months, Have you altered your Shopping Behaviour?
15
10
5
0 Less

More

Same

No. of Respond

5.4.7 Change in Multiple Expenses

This question is again related to the change in consumer shopping behaviour as it is related to
the change of frequency of purchases in various

categories. Consumers responses are

multiple in each category but showing a same trend of cutting down expenses on luxuries and
keep them constant on necessities.
Casual dining either remains constant or become less along with the same trend in fine
dining, as consumer preferred more to eat at home rather than going out for eating. It has

62
increased the opportunities for ready made meals and ready to cook food in retail stores to
meet an increased need of consumers. An increasing trend of expenses on apparel and
clothing has been reported in this study shows a positive change in consumers incomes, but
expenses on entertainment has been considerably decreased as people prefer to stay at home
now to use cheap entertainment media like TV or internet.
The expenses on kids accessories have shown a mixed trend as no specific manner is not
reported in this category, respondents treated it as an essential part of routine expenses.
Expenses on groceries have shown either an increase or stability, which confirms the fact that
despite of recession, expenses on grocery have been increased in past two years in UK
(Datamonitor 2010). This trend has supported by the expansion of retailers chains in the
country irrespective of the downsized economy. Table 5.4.7 shows the results of this question
below.

Table 5.4.7 Change in Multiple Expenses

Options
a- Casual dining
b

Less More
9
5

Same
11

- Fine dining
c- Apparel/ Personal accessories
d

9
6

8
11

5
9

- Movie/ Theatres/ Entertainment

e- Kids products
f- Home/ Furnishing accessories
g

10
7
8

5
7
8

9
7
5

- Groceries
Total

0
49

5
49

8
54

The graphical interpretation of above findings are illustrated in following fig.5.4.7

Fig. 5.4.7 Change in Multiple Expenses

63

In Past 6 months, Have you made expenses alteration?

12
10
8
6
4
2
Less 0

M ore

Same

No. of Respond

5.4.8 Cut down in Multiple Expenses

In order to under stand the decline in various expenses of consumers in recession, the
respondents were asked to identify the possible decrease in their purchasing during the
recession period. An interesting trend is observed that these consumers, who decrease their
expenses in the last two years, want to continue the same trend in future also to save more for
any upcoming slump in the country.
In response, 43% respondents reported that they cut down their expenses as a precautionary
measure to support their savings, it has confirmed our finding that UK consumers are
cautious now for any unseen deprivation in future. The other important reason of this cut
down reported was loss of job (10%) and salary cut down (15%). 10% responses were
missing as either they did not cut their expenses or were not sure about the response.
Table 5.4.8 Cut down in Multiple Expenses
Options
No. of Respondent
aAs a precaution
17
bSalary/ Wage cut
6
cUnemployment
4
dHealth issues
4
eFamily changes
4
fSaving for rainy day
1

Percentage
43%
15%
10%
10%
10%
3%

64
gMissing
4
10%
Total
40
100%
The graphical interpretation of above findings are illustrated in following fig.5.4.8
Fig. 5.4.8 Cut down in Multiple Expenses
Possible Reason, If you cut your expense in last 6 months
As a preacution

Missing

Salary/ Wage cut

Unemplyoment

3%
10%
10%
10%

Health issues

10%

Family chages

Saving for rainy day

43%

15%

5.4.9 Current Shopping Behaviour

The important trends in current shopping behaviour have been identified in this question.
Respondents were asked to describe the mode of purchasing they are using currently. 26%
have reported that they shop whenever needed and 24% were in favour of the purchase of
only necessary things. This prominent behaviour has been confirmed the fact that these
consumers are cautious enough and badly recession ridden that they cannot afford
unnecessary or luxury purchases.
The other prominent trends are proper budgeting and shopping planning to avoid extra
purchases, and wait for upcoming sales and discount offers from stores to buy things at
economical rates. There is very less percent of unplanned shopping behaviour (11%) and
shopping on festivals and occasions (9%). This trend shows low disposable income and fewer
sales on important occasions like Christmas and Easter festivities.
Table 5.4.9 Current Shopping Behaviour
No.
Options
a- Only purchase necessary things

Respondent
11

of
Percentage
24%

65
Proper budgeting/

List

making

before

b- shopping
c- Wait for sale/ discount/ coupons
d- Festivals/ Events/ Occasions
e- Shop whenever needed
f- Shop without any plan
Total

7
7
4
12
5
46

15%
15%
9%
26%
11%
100%

The graphical interpretation of above findings are illustrated in following fig.5.4.9

Fig. 5.4.9 Current Shopping Behaviour

Statments Best Define your present Shopping Behaviour
Only purchase necessary things

Festivals/ Events/ Occasions

Proper budgeting/ List making before shopping

11%
24%
26%
Shop whenever needed

15%

Wait for sale/ discount/ coupons

Shop without any plan

9% 15%

5.4.10 Online Shopping Behaviour

Online shopping is an emerging trend in UK consumers and retailers take it as a new
opportunity for market expansions. Respondents were asked about their normal practices in
using internet as a shopping medium. The most prominent inclination identified among
consumers was to use internet extensively for browsing and searching but preferred purchases
from physical stores only (33%). They prefer online purchases only when the particular
item/s is not available on store (20%). These two tendencies show that internet use has been
widely increased in buying decisions of consumers but still the trust level and credibility of
internet sales has not reached up to a certain level that online purchases become the first

66
option of online shopping; the trend is largely limited to information gathering and brands
comparisons only.
Still a large percentage of consumers never opted for online purchases (15%) due to lack of
online resources or lack of medium trust. Missing values are also considerable (18%) in this
question, reflected those people who either not known much about this medium or did not
have any interest in online shopping offers. Retailers are required to increase the awareness
level of common consumers about online groceries or household shopping if they want to
increase the market share of online selling.
Table 5.4.10 Online Shopping Behaviour
Options
a- Internet purchases are preferred
b- Search on internet but purchase from store
c- Purchase online if not available on stores
d- Never does online purchases
e- Missing
Total

No. of Respondent
6
13
8
6
7
40

Percentage
15%
33%
20%
15%
18%
100%

The graphical interpretation of above findings are illustrated in following fig.5.4.10

Fig. 5.4.10 Online Shopping Behaviour

Statements Best Describe your interent use When decided for household, gift or personal shopping
Internet purchases are preferred

Search on internet but purchase from store

18% 15%
Purchase online if not available on stores Never does online purchases
15%
33%
Missing
20%

67

5.4.11 Communication with retailers

Reach to target customers is the prime goal of marketing campaign of any company. In
recession, the main target of retailers is to send their message through appropriate and
economical medium which can affect on their target audience. This question is linked with
the same concept of reaching consumers.
When respondents were asked about the most suitable medium of communication for retailers
to address target consumers, the major response came in favour of In-store marketing
activities (28%) through flyers, digital signage, hangers, shelf talkers etc. Other media also
received nearly equal responses like 20% audience supported each of the TV commercials
and email/SMS messages, and 23% to the news paper advertisements. This finding reveal that
all of these media are important for retailers to access target audience, it depends on the type
of message and time of the year that some media suits more than others, but in store
marketing is the most effective and suitable for all purposes. A retailer should focus on the
disbursement of important information through this medium throughout the year.
Table 5.4.11 Communication with retailers
No.

of Percentag

Options
a

Respondent

Newspaper ads

23%

TV commercials

20%

Email/ SMS messages

20%

In store/ outdoor signage

11

28%

Radio ads
0
Not preferred any of the

f- above

0%
10%

68
Total

40

100%

The graphical interpretation of above findings are illustrated in following fig.5.4.11

Fig. 5.4.11 Communication with retailers

% of Res pondent

Retailer bes t way to reach you for s ales , events & goods
28%
23%
20%
20%
30%
20%
10%
0%
No.of Respondent
-10%

10%

5.4.12 Preference of Online Communication mode

In this question, respondents were asked to elaborate the reason to prefer online
communication by the retailer. Respondents have to identify the most important purpose of
the type of communication that serves to them, majority have opted (28%) that online
communication modes like websites, email, social networking can save search time of
consumer for a particular range of products. 20% have opted that online communication is
easy to share with others and information can transfer to the concerned person in no time.
This medium not only provides great opportunity to consumers to receive and compare
maximum alternative for their needs but it is also a cost effective promotion tool for retailers.
Consumers have also favoured the reason that through this mode of communication they can
stay in touch with new trends in the market. New products, fashion trends, and technology
updates can easily be accessible through internet sources. In this question, 20% missing
values show that a large portion of customers are still unaware of the utilization of this

69
relatively new promotion tool, their awareness to internet applications is a big challenge for
retailers and manufacturers.

5.4.12 Preference of online Communication mode

No.
Options

of

Respondent

Percentage

11

28%

b- purchases

10%

c-

Easy to share with others

20%

d- Stay in touch with new trends

23%

e-

20%

40

100%

a-

Can save search time

Maximum information

collection

for

future

Missing

Total

The graphical interpretation of above findings are illustrated in following fig.5.4.12

Fig. 5.4.12 Preference of online Communication mode

Reason best describe the type of communication you have selected in Q#12
50%
41%
40%
30%
% of Respondent

17%

20%
12%

17%
12%

10%
0%
Online retailers
Phy sical location M
retailers
alls/ shop ping
Catalogue/
centresmarketing comp
None
anies
of the above

70

5.4.13

Online communication preference

In this question, respondents were asked to identify most appropriate organization to the
online communication. 41% respondents favoured that online retailers need to use internet
communication with prospective and existing customers. The other suitable companies are
shopping malls (17%) and catalogue marketing companies which sell products through their
available catalogues. As the online shopping trend increases, customers also become more
aware about the type of products and/or services they can get from internet. Retail chains
like Tesco can improve its online grocery marketing through online communication channels.
Table 5.4.13 Online communication preference
No.

of

Options
a- Online retailers
b- Physical location retailers
c- Malls/ shopping centers
Catalogue/
marketing

Respondent
17
5
7

Percentage
41%
12%
17%

d- companies
e- None of the above
Total

7
5
41

17%
12%
100%

The graphical interpretation of above findings are illustrated in following fig.5.4.13

Fig. 5.4.13 online communication preference

Types of Companies you choose to Communicate by Email

Online retailers

Physical location retailers

Malls/ shopping centres

12%

17%

None of the above

17%

41%
12%

Catalogue/ marketing companies

71

5.4.14 Preference of Retailers Information

In this question, respondents identified that they want to receive which type of information
from retailers. This question relates to collect the consensus of customer about the type of
information which suits them more. Announcements of sale in stores has received the
maximum percentage of 41%, it shows that consumers are more interested in getting updates
about upcoming clearance sales of stores as it is an effective way of cutting down expenses.
Respondents were also interested in receiving new products arrivals information (18%) and
announcements of special events to be organized by retailers (17%).
Table 5.4.14 Preference of Retailers Information
Options
No. Of Respondent
aSales information
14
b- Printable coupons
5
cSpecial events announcements
7
d- New products information
7
eProducts reviews/ shopping trips
5
fMissing
2
Total
40

Percentage
35%
13%
18%
18%
13%
5%
100%

The graphical interpretation of above findings are illustrated in following fig.5.4.14

Fig. 5.4.14 Preference of Retailers Information
E-mail information do you want to receive from a retailer or shopping center

Sales information

Printable coupons
5%
13%

Special events announcements

35%
18%
New products information

Products reviews/ shopping trips

18%

13%

Missing

72

5.4.15 Preference of Purchase coupons

In recession, consumers base their shopping largely on the discount and loyalty cards of
stores and saving coupon released by big retailers regularly. In this question, it was asked
from participants that which type of coupons they would prefer to receive. 30% answers are
in favour of the receipt of retail coupons through email. The next high rate of favoured
response is received by the news paper clip and use coupons (23%). This trend shows the
importance of online communication channel and print media in processing of information.
18% missing data in this question show a greater need of awareness in consumers about the
available opportunities in the market for saving their time and money in purchasing.
5.4.15 Preference of Purchase coupons
Options
aDirect mail clip & use coupons
bNewspapers clip & use coupons
cRetail coupons through email
dOnline printable coupons
eMissing
Total

No. Of Respondent
7
9
12
5
7
40

Percentage
18%
23%
30%
13%
18%
100%

The graphical interpretation of above findings are illustrated in following fig.5.4.15

Fig. 5.4.15 Preference of Purchase coupons

How often types of Coupons use from any retailer?
Direct mail clip & use coupons

Newspapers clip & use coupons

Retail coupons through email

18% 18%

Online printable coupons

13%
Missing
30%

23%

5.4.16 Social networking of retailers

In this question, another important trend in consumer behaviour has been discussed i.e. about
the use of social networking sites and their extreme popularity among youth. Respondents

73
were asked to identify the impact on retailers presence on Facebook and twitter on its image
in consumers minds. 30% response was in favour of neutral impact on brand image after the
representation of retailer on social networking sites. 20% have identified a positive response
and only 10% declared negative response. Also, 20% respondents were not sure about the
answer as they are not the users of social networking circles. This factor has indicated that
utility of internet resources is not very common among the large portion of senior population
and they are not benefitted from the online campaigns and services of retailers.
Table 5.4.16 Social networking of retailers
Options
No. of Respondent
Percentage
aPositive
8
20%
b- Negative
4
10%
cNeither of the above
12
30%
d- Never visited these sites
8
20%
eMissing
8
20%
Total
40
100%
The graphical interpretation of above findings are illustrated in following fig.5.4.16

Fig. 5.4.15 Social networking of retailers

Your Impression of Retailer or Shopping Center that use Twitter or Facebook
20%
Positive

Negative

20%

20%

Neither of the above

Never visited
10% these sites

Missing

30%

Chapter VI
Discussion on Data Analysis
The objective of this study is to investigate the affects of present financial crisis on UK
consumers. Data collected from respondents revealed some useful information about the

74
recent trends of consumers. These useful findings can be used by the academia and the
industry to devise effective market strategies to achieve, retain and increase good consumers.
This discussion on the research findings in this chapter will elaborate the implications of
theory on the real life results.
The two major buying behaviours came forward in this study are classified as planned buying
behaviour and unplanned buying behaviour. These two behaviours consisted on the various
attributes of consumers found in this study. According to Arnould et al., (2002), planned
buying behaviour has extensive decision making and programmed attributes, but unplanned
buying behaviour has limited decision making and impulsive purchasing.

6.1 factors drive consumers buying decisions in

recession
The question related to this area related to the exploration of vital factors which contributed
the purchasing behaviour of UK consumers (chapter 1 sec 1.7). The hypothesis proposed for
this research question is as follows:
H1:

Price sensitivity and economies of scale become the important elements in buying

decisions of consumers in recession.

In this financial crisis, an increased and widespread transactional complexity is generated
due to the involvement of less disposable income, pay cuts, unemployment, high interest
rates, and consciousness of financially deprived consumers. The risk in purchases has been
increased for consumers and they are forced to shift their buying preferences to less
expensive substitutes. The criteria of selection of a shopping place are found to be dependent
on the loyalty cards, discount offers, and convenience location (see section 5.4.1). This is due
the priority of long term price gains and quality assurance of store brands. Also, the shopping

75
trips to the discount stores have been increased along with the decrease in visits to the luxury
stores (see sec. 5.4.6).
A planned buying behaviour is prevailed among UK consumers to select best available
alternative within their financial constraints.

Complex decision making processes are

involved to reduce transactional costs in purchasing; consumers are more involved in

gathering relevant information and selection of alternatives (Foxall and Goldsmith, 1994).
Another evidence of price sensitivity is gathered from the section 5.4.2 about the weekly
spending on grocery shopping. The majority respondents shopping budget lie in the lower
range of expenditure shows the cost saving behaviour of consumers.
The conducted consumer survey exposed that customers are extremely susceptible to the
worth they obtain in their monetary transactions (Brassington and Pettit, 2007). This concept
of value and economies of scale has been verified in section of multiple expenses (see 5.4.7)
which shows that regardless of positive trends in increasing purchase of apparel and house
accessories, people are focused at casual dining rather that expensive luxury dining.
Customers preferred bulk buying of cheap food and other necessities to ensure economies of
scale in their purchases.
The hypothesis H1 has been verified from the collected data analysis of this study. There is
no evidence collected to reject the hypothesis that price sensitivity and economies of scale
become the important elements in buying decisions of consumers in recession.

6.2 The most suitable marketing tools during recession

The research question dealt with this area of study was stated in chapter 1 that what are the
most suitable marketing tools during recession used by successful organisations to attract
consumers? And the related hypotheses proposed that

76
H2:

The strategic online marketing strategies are important management tools in

recession in retail chains of UK.

The findings of the research supported the above given hypothesis that due to scarcity
of time and savings of transactions and storage costs, online grocery marketing is one of the
most feasible marketing strategies in big retailers of UK. Section 5.4.10 presented the
findings of online shopping behaviour of respondents that 33% people use online channels to
extract product information online and then purchase it from physical locations.

20%

consumers purchase those items regularly online which are not available on physical
locations. E mail has become a first choice for consumers in the available communication
mediums with retailers (see 5.4.11).
The seven Ps of marketing mix included product, pricing,

promotion, place, people,

physical appearance, and process are required to be integrated in order to release the
consumer pressure and to exploit the demands of the market (Groucutt et al., 2004). Kotler
(2009) termed these factors as the most important in efficient marketing strategies of the
company. In present case of UK retailers and consumers the processes (online marketing,
loyalty cards, and discount packages), people (support staff) and price (lowest price for
quality products) is the most important determinants of marketing mix (see section 5.4.9 and
5.4.6).
The above selected components are most viable components which had tremendous affects
on buying decisions of consumers (Churchill and Peter, 1998). Also, hard discounters
normally have a drastic impact on consumers due to their inappropriate and low quality
services as the focus only on low pricing but not on durability of products and effectiveness
of services (Mintel Oxygen, 2008). Though, consumers prefer discount stores as compared to
luxury and high profile stores due to the circumstances of the current financial crunch and the

77
high rate of unemployment. In these crucial conditions, most companies and giant retailers
are suffering from the hindrances of capacity management and as a result badly performed in
actual delivery of the service, therefore consumers experiences are not good in transactions
with these stores.
The progress of in-store incentives to exert a pull on consumes awareness and focus on non
traditional marketing, advertising, and sales channels are suggested for retailers. The current
study also reveals that UK consumers also largely inclined towards internet shopping (section
5.4.10), and are active part of social networking online channel like Facebook and twitter.
UK retailers included Tesco should see it as an opportunity to enhance the pool of online
consumers and meet the challenges of display, availability and delivery of required online
products.
Also, online websites and portals like Tesco.com can be renowned as shopping means with
issues of failure, outdated data, and security of financial transactions. These consumers
experiences generate a negative feedback of the sites that also ultimately impacted the online
physical transactions. Prompt and reliable responses of emails, information brochures, and
updated site contents can improve the performance of online shopping websites. Though, it is
not an easy milestone to achieve in this time of recession when companies find it hard to
access enough capital to establish, operate, and maintain online supply chain management.
Another successful marketing strategy in recession to increase unplanned buying behaviour
in consumers is suggested to be innovative marketing. In order to receive the consumer
attraction and to increase the market share, new ideas of marketing like introduction of Tesco
Club Card can gain the attention of customers rapidly. In this financial constraints period,
introducing discount products, searching new niche markets, and enhancing service practices
can change the scenario for retailers after recession period. Discovering new niche markets

78
and relocation of positioning strategies can make this period fruitful for the retailers
(Hawkins 2008). In contrast, the low disposable income of UK consumers have enforced
them to restricted to only necessary purchases when needed with proper listing and budgeting
(see section 5.4.2, 5.4.9, and 5.4.12). Innovative marketing strategies can fail also in the
consideration of the financial constraints of UK consumers, but they can be used to increase
the brand awareness in new consumers.

The carried out research disclosed that the current monetary crisis has considerable affects on
consumer buying behaviour in both planned and unplanned categories. Companies need to
adopt lucrative in store marketing efforts to attract the visiting customers and generate
impulse buying. In place of a single value proposition for the products display and marketing,
number of various value propositions can gain the attention of multiple taste consumers. The
marketing efforts need to be tailored to meet the unique individual needs of financially
deprived UK consumers to drive them emotionally. Unplanned and momentous buying
decisions are largely dependent on the store attractions and lucrative offers.

6.3 Core challenges and practices of consumers in UK

retailers
The research question related to the area of the core challenges and practices of consumers in
UK during recession in retailers point of view. The proposed hypothesis for this question is as
follows:
H3:

Consumers follow identical practices and face same challenges in recession

irrespective of the type of retail business.

This hypothesis is dealt with the affect of changed life patterns of consumers on various
retailers businesses. In section 5.4.16, another important trend in consumer behaviour has

79
been discussed about the use of social networking sites and their extreme popularity among
youth. The impacts of the presence of retailers and their employees on Facebook, twitter and
other online networks were explored by consumers and identified impacts of their presence
on consumers mind set. The findings have shown that 30% response was in favour of neutral
impact on brand image after the representation of retailer on social networking sites. 20%
have identified a positive response. Retailers like Tesco can enhance their presence on social
networks to communicate effectively with its consumers and to collect first hand information
about its services and products.
Another important finding in this area is the preference of purchase coupons by consumers
(see section 5.4.15), consumers preference has been increased due to the financial restrictions
in recession. Tesco can increase its lucrative sale offers through purchase coupons, e-mail and
news papers are two most preferred modes of communication for consumers for disbursement
of these coupons.
Consumers preference to select a particular store chain is an important concern for major
retailers; respondents identified the popularity of major retail stores of UK among consumers
in recession (see section 5.4.3). The results of this question show that maximum consumers
(44%) preferred Tesco in their regular visits. They shared the reasons of this high frequency
of visits as their trust on available products at the store and availability of large number of
Tesco outlets in their neighbourhood. These customers have Tescos Club card which help
them in payments of regular purchases and availing of multiple discount offers at Tesco.
Sainsbury gained the second rank (21%), and Asda received third preference (19%) in this
ranking from respondents. This result has shown that Tesco has established its leading
position in UK and consumers preferences have not been changed in past decade about
selection of their favourite chain of stores.

80
The saving patterns have been drastically affected by the recession in country but a recovery
has been observed in last six month of 2010; this trend has been shown in consumer
responses in this study also. 23% participants succeeded in saving more amounts this year i.e.
they in better financial condition, where as 33% have felt no change in the saving pattern or
their income and expenses are not changed in the current year. Only 18% have reported a
decline in saving pattern as they still not able to come out of the financial depression of last
two years. Though the saving patterns show a positive trend and stability, the consumers in
UK are still cautious and are not willing to increase their spending on luxury and premium
products in near future.
These results of the study have provided enough evidence to accept our hypothesis related to
the consumer preferences and choices of retailers have not been much changed in recession.
The academia and retailers can use this finding to explore new dimensions of change and to
enhance their capabilities to meet consumers responses.

6.3 Case Study Analysis of Tesco

In order to support the findings and analysis of consumers survey, an interview was
conducted from the management of Tesco super market located in central London.
Researcher had proper informed the management about the nature and scope of the research.
They have given the assurance of anonymity and confidentiality of collected data in order to
gain their complete confidence.

The results of this single interview will represent the

response of all Tesco stores as homogeneous management and operation policies are used in
all stores located in UK (tesco.com 2010).
The interview questionnaire was composed on semi-structured questions which serve
the purpose of mixed research methodology of quantitative and qualitative data collection.
This qualitative data is based on close ended questions related to routine activities and
consumers behaviour. Where as, open ended subjective questions were included to record the

81
management perspective and analysis of visiting consumers perceptions. Researcher has
recorded the answers of management personally on questionnaire and clarified the raised
queries of respondent instantaneously.
The Findings of this interview revealed the following attributes of the store and its
loyal customers.
The most attractive features for regular customers in Tesco were their store promotions, low
prices with respect to competitors, loyalty cards and other discount schemes, convenient
locations of stores, and large selection of products available at stores. These findings are in
accordance with the consumer preferences explained in chapter 5, section 5.4.1. The average
spending of a consumer in Tesco is in range of 20-30 GBP, which matched the average
consumer buying in section 5.4.2. The recovery of UK from recession is verified by the
response of store management that average spending of consumer is better than that of last
year.
As far as classification of consumer spending is concerned, the clothes and home furnishing
purchases become less, kids purchases remained same, and grocery purchases increased.
This finding has supported the conclusion that UK consumers are still cautious in their
spending after recession. This behaviour has also verified from the response that consumers
present shopping behaviour is largely focused at sale and discount offers, occasional
shopping on events, and need based purchases only.
The online grocery market is showing a rapid growth pattern and Tesco is one of the market
leaders with their Tesco Direct online grocery stores, but still the consumers prefer to collect
information from online catalogues but purchase from stores. This result matches with the
findings of consumer survey in sections 5.4.10, 5.4.12, and 5.4.13. Consumers selection of
goods is random and highly focused at front shelves for the sake of urgency and convenience.

82
There fore, in-store marketing and national brands positioning would depend on this common
perception of consumers at Tesco. In order to showcase all brands and available line of
products, the in-store settings are changed frequently after each season. The major marketing
techniques used by management is placing high margin and profitable products in front
shelves and use banners at the entrance to announce new products arrival and stores various
schemes. Also the sales staff guides consumers about new products placements and features.
Families are the dominant group of regular customers that shows the Tescos popularity in
UK house hold. The main product categories sold in the store are grocery, kids products, and
personal care products. The main issues raised by regular customers are related to pricing,
long queues at checkout counters, and availability of stock. Though management reported
that on the average 20-30 customers cleared per hour from the tills but still they need further
improvement in this area. On pricing issue, Tesco stands second after ASDA in low prices,
but its consumers demanded more price decease.
These findings from interview also gave an answer to the devised research question that
retailers should learn from the analysis of consumers behaviour in recession. Proactive instore and online marketing is necessary to provide competitive products and services at
economical rates. The consumers in UK are financially deprived after depression, stores need
long term win/ win relationships with customers to establish the consumers trust and to boost
own sales.

6.4 Summary
The above extensive discussion has been used to relate the research findings to the
proposed hypotheses and to answer the raised questions in this study. The detailed discussion

83
combines all the important findings about the consumers preferences and choices in difficult
periods of recession. Consumers opted for big and established chains of stores, loyalty cards,
discount coupons, online communication, update information about clearance sale, and other
saving techniques. The suggestions to the selected organization Tesco also put forward in
above discussion. The proactive strategic marketing tools with in-store promotions and online
resources will certainly facilitate Tesco in gaining consumers attention and expanding market
share in UK.
The interview findings at Tesco are in accordance with the findings of consumers behaviour
survey results explained in chapter 5 of this study. These above explained results are also
validated the tested hypotheses in previous sections of this chapter. The consumers survey
and its results are justified and proved relevant after the interview of Tesco management.

Chapter VII

84

Conclusion and Personal

Reflection
7.1 Conclusion and Recommendations
Presently, UK is facing a great financial challenge, resulted in monetary crisis for UK
consumers since 2008. This crisis has multi-dimensional attributes, created several affects on
social and economic life patterns of consumers and retailers. Consumer purchasing behaviour
is also highly affected by the impacts of financial crunch. The decrease in disposable income,
job cuts, unemployment, inflation, and availability of economic goods are some challenges
posed by this recession to the consumers on various aspect of the economic and social life of
the country. In this context one of the most severely impacted components of the UK
economy was the consumer buying behaviour.
Consumer buying behaviour is dependent of variety of decision making parameters; these
influential factors can be internal or external. In present scenario, the unstable financial
conditions of the country have affected at the maximum to the buying behaviour of
consumers. According to retailers point of view, the businesses are highly suffered due to
the change in both planned and unplanned buying behaviour of consumers. Consumers
choices have been shifted to economical solutions, necessary buying, discount stores
preferences, loyalty cards and other long term saving associations with retailers, and
preference of low cost online purchase are some major attributes revealed in present study.
These extreme volatile conditions have become a big challenge also for market leaders like
Tesco. Irrespective of their sound financial conditions and rapid market growth, this crisis
had become a challenge for them and forced them to take proactive marketing initiatives.

85
According to Shim et al., (2001), the efficient marketing strategies can help a company to
respond the complex behavioural changes of consumers. The suggested marketing strategies
in this research are the integration of effective marketing mix strategies to explore the hidden
potentials of retail markets, innovative online and in shop marketing can facilitate the
attraction and retaining of financially deprived and conscious customers by the retailers.
The research findings have validated the proposed hypotheses that price sensitivity and
economies of scale become the important elements in buying decisions of consumers in
recession, strategic marketing strategies are required by retailers to excel in difficult financial
conditions, and the consumers behaviour is identical and pose same challenges to all retailers
in the market irrespective of their size and market share. These findings are in accordance
with Arnould et al. (2002) and East (1997) theories of programmed and limited decision
making models of consumer decision making discussed in literature review. Therefore,
successful retailers like Tesco require a combination of inventive promotions, exclusive
selling propositions, striking in-store environment, sufficient pricing, high quality customers
service and physical confirmation for high-quality products. The most probable results of
adopting these strategies are long-term market share growth and increase in consumer loyalty.
The analysis of Tescos management interview justified and validated the findings of
consumers survey. According to the concepts of Donovan et al. (1994) and Mehrabian and
Russell (1974), stores image create limitations on buying decisions, there fore retail
environment at Tesco is acted as a stimulus of environment on consumer responses. On the
basis of interview and survey data analysis, Tesco is recommended to adopt proactive
marketing policies for both in-store and online operations. The consumers are still cautious
and demand exclusive quality at discounted rates. The establishment of trust for online sales
is necessary to ensure the customer about the quality of goods and efficiency of online

86
transactions. Better store setting to attract customers can be achieved through front shelves
display of popular and high demand products. According to Kotler (1996), retail marketing is
focused at consumers perceptions of marketing mix components; therefore Tesco has to
adopt every day low pricing strategy to become a leader in lowest price also. The customer
loyalty cards and effective discount schemes are strength of Tesco, but its global operations
demand more diversification and customized strategies suited for every culture.

7.2 Personal Reflection

This thesis on the impact of recession on purchasing behaviour of UK consumers: Case study
of Tesco chain of stores is the basic requirement for the achievement of Masters degree. I
have selected this field of study because of its universal importance and significance in
academia and in retail industry. From the commencement, this research has proved to be
attractive and be source of knowledge. To conduct this research, the scholastic literature has
been explored to distinguish, recognize, and to figure out the prior theories and researches in
the field of consumer buying behaviour. The findings of these academic journals and books
have considerably improved my understanding of UK consumers behaviour.
The selection of suitable respondents and case study of a big retailer was really a challenging
task. By conducting this research, I have learned about the leading retailer Tesco, its
operations, and the consumers perceptions about the trends of shopping in recession. In
future, application of learned concepts in real life will be the most worthwhile experience of
this assignment.
I have come across the various trends of consumers in recession, their brand preferences,
selection of grocery chains, and online communication choices. The organizational structure
of Tesco has also been studied in detail and suggestions and recommendations have been

87
given to the organization. The proactive strategic marketing strategies will help organization
to attract customers and increase market share.
The knowledge characteristic of this research project will facilitate the progress of my
experiences in professional life. Further research in this area can extend concepts and
applications of consumer purchasing behaviour in industry and in academia.

88

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