E-strategy in the UK retail grocery sector

Abstract

After a decade of Internet trading, retailers in the UK have experienced mixed fortunes with their Internet-based ventures. Online shopping success stories include; Tesco’s, which has positioned itself as a world leader in online grocery retailing by providing an Internet-based home delivery of over 40,000 products and making the service available to almost 95 per cent of UK residents. Similarly, Sainsbury’s offers 71% per cent of UK residents the opportunity to shop online however the company does not have the same international recognition. Waitrose too has expanded its Internet-based shopping services, aided by its acquisitions in OCADO. By contrast, Somerfield, and more recently Iceland have stopped their Internet shopping operations due to poor trading results and economic difficulties, despite the fact that Iceland was the first grocery retailer to offer online shopping to the majority of the UK mainland. The key aims of this paper are to explore how major grocery retailers coming to the one line market; to consider why some are more successful than others and to develop an understanding of the role of strategic thinking in online retailing. More specifically, the paper will initially, investigate the strategic options open to retailers developing activities online and finally, discuss the extent to which e-strategies represent a long-term approach to planning. The paper presents a literature review, which provides the conceptual foundations for investigation of the significance of e-strategy development within retailing. This model is then compared with evidence from secondary data sources and business results from leading UK grocery retailers in order to debate and analyse the likely importance of e-strategies in the success of online grocery retailing in the UK