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Budgens plc: coping with competition in UK grocery retailing

Budgens plc: coping with competition in UK grocery retailing Five years ago, Budgens plc, Britain’s tenth largest grocery retailer, established an alliance with REWE of Germany to develop a discount format in the south of England ‐ Budgens’ heartland ‐ to exploit what was perceived as a growth area in the UK as the other multiples had tended to vacate this sector of the market. Budgens had no experience of discounting and thus an alliance with REWE, a large German discount operator, was an attractive proposition. The article explains why and how the alliance developed and, importantly, assesses why the experiment was relatively short‐lived. Essentially, it illuminates the problems of attempting to pursue both differentiation and cost/price leadership strategies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Retail & Distribution Management Emerald Publishing

Budgens plc: coping with competition in UK grocery retailing

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Publisher
Emerald Publishing
Copyright
Copyright © 1998 MCB UP Ltd. All rights reserved.
ISSN
0959-0552
DOI
10.1108/09590559810201196
Publisher site
See Article on Publisher Site

Abstract

Five years ago, Budgens plc, Britain’s tenth largest grocery retailer, established an alliance with REWE of Germany to develop a discount format in the south of England ‐ Budgens’ heartland ‐ to exploit what was perceived as a growth area in the UK as the other multiples had tended to vacate this sector of the market. Budgens had no experience of discounting and thus an alliance with REWE, a large German discount operator, was an attractive proposition. The article explains why and how the alliance developed and, importantly, assesses why the experiment was relatively short‐lived. Essentially, it illuminates the problems of attempting to pursue both differentiation and cost/price leadership strategies.

Journal

International Journal of Retail & Distribution ManagementEmerald Publishing

Published: Feb 1, 1998

Keywords: Differentiation; Price discounts; Pricing strategy; Strategic alignment

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