Pricing and Social Trends | Edexcel Business

[Maximum number: 10]

Extract C About Aldi Aldi was founded by the Albrecht family in Germany. The family had owned grocery stores since 1914 when Anna Albrecht opened a small store. Aldi remains a family business and is now run by brothers Theo and Karl Albrecht. Aldi believes that great quality should not come at a high price, rather that great quality should come with everyday low prices. Aldi focuses on giving customers quality food, good customer service, low prices and a quick and easy efficient shopping experience with only four to five store aisles but with all grocery essentials. Aldi sources much of its produce from local suppliers. The stores partner with local growers and farmers to offer a wide variety of fresh produce, including organic fruits and vegetables. There are thousands of Aldi stores throughout Europe and it has expanded into the US. Aldi is one of the UK's fastest growing supermarket chains and plans to have 1,200 stores in the UK by 2025. Aldi has won numerous awards for offering competitive rates of pay and excellent working environments for all its employees. In the UK Aldi is known for promoting its 'Super 6 fruit and vegetables'. Each week there are six types of fruits or vegetables offered at a reduced price. Aldi sponsors the UK Olympic team to promote a healthier lifestyle and advertises its Super 6 products using TV and other media.

Extract D What does the future hold for the UK grocery industry? In response to changing social trends in the UK, supermarkets are having to adapt. The rise of the German-based stores, Aldi and Lidl, which both sell at low prices, have forced the UK's largest supermarkets (Tesco, Asda, Sainsbury's and Morrisons) into changing how they operate. The way that people in the UK shop for groceries is changing. People are shopping more frequently for fresh groceries and using online services. Tesco is planning to offer a one- hour delivery service. Fewer shoppers are loyal to a specific supermarket as more are using price comparison websites to compare supermarkets.

Extract E Market share (by sales revenue) of the top 10 UK Supermarkets

Table for Question 1.3.3.4c - Pricing and social trends question 1 — Edexcel A-Level Business AS

Assess the likely impact of price comparison websites on supermarkets in the UK.

Indicative content guidance
Answers must be credited by using the level descriptors (below) in line
with the general marking guidance. The indicative content below
exemplifies some of the points that candidates may make but this does
not imply that any of these must be included. Other relevant points
must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative
content
- Price comparison websites compare the price of a
particular product or service in different stores or from
different businesses
- A supermarket will have to ensure that the pricing of its
products is competitive in comparison to other
supermarkets if customers are price conscious
- The websites may have a negative effect on sales for
some supermarkets as customers are able to compare
prices on the internet and select the cheapest place to
shop. This may affect the sales of those supermarkets not
focussing on low prices
- Some supermarkets may have to promote other elements
of the marketing mix to gain a competitive edge rather
than competing on price, such as Tesco offering a one-
hour delivery service
- It may have no impact because there are many factors
that affect demand for supermarkets, such as range of
foods and location of the store
- Although the market share of Aldi and Lidl has increased.
Tesco has lost little market share between 2019 and 2020
which may indicate customers are less concerned with
price and have some loyalty to a specific supermarket
- Overall if more customers use the price comparison
websites it is likely than some businesses, such as Aldi,
are likely to gain market share whilst others selling at
higher prices may see their market share falling

Level

Mark

Descriptor

0

No rewardable material.

Level 1

1-2

Isolated elements of knowledge and understanding - recall based.

Weak or no relevant application to business examples.

Generic assertions may be presented.

Level 2

3-4

Elements of knowledge and understanding, which are applied to the business example.

Chains of reasoning are presented but may be assertions or incomplete.

A generic or superficial assessment is presented.

Level 3

5-7

Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s).

An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of competing arguments.

Level 4

8-10

Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.

A coherent and logical chain of reasoning, showing cause(s) and/or effect(s).

Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information, and shows an awareness of competing arguments/factors, leading to a supported judgement.

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1.3.3.4c - Pricing and social trends question 1