Analysis of the Effect of the Recession on Hypermarket Retailing Essay

Analysis of the Effect of the Recession on Hypermarket Retailing Industry in Brazil - Essay Example The economic reviews of Brazil’s retail industry out that the Gross Domestic Product (GDP) rates are cumulatively increasing year by year. The practice of consolidation of the hypermarket retail industry has been continuing but in general, the hypermarket remains comparatively fragmented, representing substantial span for the big players to develop their market strength in future. The leading 3 market players are controlling the hypermarket retail industry in Brazil; they are Pao de Acucar, Carrefour, and Wal-Mart. Other players are leading through acquisition. The recession affects the revenue of sales and the decline of the profit in the retail industry, Recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production and wholesale-retail sales" (What causes a recession? 2012). In this study, the recession affects the business of hypermarket retailing industry. Recession affects various aspects of business such as the purchasing power of consumers, buying behavior, and the income disposable level of people has increased significantly. There are many other factors that contribute to the fall in economy's into a recession, but inflation is the major reason for recession. â€Å"Inflation is defined as a sustained increase in the general level of prices for goods and services† (All about Inflation 2012). Inflation indicates the general increase in the price of products and services over time period. The rate of inflation is higher; the consumers purchase lower percentage goods and services with the same price. The time of recession affects the hypermarket industry in Brazil; the major players of hypermarket industry in Brazil are Pao de Acucar, Carrefour and Wal-Mart. Recession mainly affects these companies because they are retail stores. â€Å"The ec onomic crisis makes low-price concepts particularly adapted, and all three international retailers can potentially benefit from this trend. Expansion in Brazil is still ongoing and a strategic focus for all three groups† (Carrefour, Casino and Wal-Mart’s Expansion Strategies in Latin America 2012). Hypermarkets provide durable and non-durable goods. The retail industry of Brazil is segmented in three parts, they are Grocery Retail Non-Grocery Retail Non-Store retail These three categories are the main drivers of Brazil’s retail industry. The retailing of grocery is at a constant growth, and has gained its sustainability to the growing people who belong to low income group. The hypermarkets and large retailers are focusing on grocery, and also investing on the non-grocery items such as foot wears, fashion clothing, and sundries. The retailer’s Wallmart and Carrefour focus on developing personal labels for their own clothing brands and footwear. The Recessio n Impact of Retail Industry: â€Å"A recession normally takes place when consumers lose confidence in the growth of the economy and spend less, this leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment† (Malik & Pandit 2012). The impact of recession in retail industry will decrease the proper demand and also enforces stress on the prices, and leads to the absence of price-war in the retail market. To keep the consumers, the

Supply chain management Essay Example | Topics and Well Written Essays - 250 words

Supply chain management - Essay Example The practice is used in rating the sustainable practices of retail stores and super markets. Reports shows that food sold in UK is made to travel for 65% more than the distance travelled in the last two decades. Since imports are cheaper and more bountiful when brought in from third world countries, local nearby farms are being forced out of business (Stancu, 2006). A critical reading of Stancu (2006) shows that the supermarket can become more environmentally friendly if it developed the system of procuring as many items as possible from nearby farms. By sourcing from nearby farms, a lot of carbon emission is avoided in the form of fuel consumption, packaging, pollution from vehicles, wastage on the road, etc. It is an accepted fact that organisation can do more to save the environment by buying local products than anything else. Items such as fruit, vegetables, meat and dairy products and other such items can be procured locally. It may not be possible to procure all items from loca l markets. However, efforts can be taken to procure then from the same district or even from within the country. Not only will the supermarket help to reduce the carbon emission but it will also take concrete steps to achieve corporate social responsibility. This is the best way to achieve sustainability. References Stancu, C., 2006. Food Miles – the international debate and implications for New Zealand exporters.