GDP, inflation, unemployment
UK National Statistics
National Minimum Wage
Economic: If the GDP of a country increases this means that country is more economically healthy. If UK’s GDP was to increases this would mean lower unemployment rates and wages increasing because of industries needing more workers to keep up to the standard of the growing economy. This would benefit Tesco because they would be able to expand out and branch into new locations, increasing their profit margins and maximising their profits.
If inflation rate in changes in the future this can have either a positive or negative impact on Tesco. If it rises the value of the goods will be higher than they were before inflation rates rose, this means less people would be able to buy Tesco’s products – But Tesco may still be able to earn profits from their ‘Tesco Value’ goods which are significantly cheaper than named brand items. If inflation rates do decrease more people will have ‘purchase power’ and will be able to purchase Tesco’s goods and services.
If unemployment rate changes in the future it can have either a positive or a negative effect on Tesco, if it increases then more people will be on job seekers allowance which then leads to more people who will have to spend less at Tesco or not shop at Tesco at all. However, if it decreases this would benefit Tesco because more people would have jobs which means they’d be able to afford to shop at Tesco (increasing Tesco’s sales, leading to increment of profit).
Political: A change in corporation tax can have a political effect on Tesco. If the corporation tax changes than the company can be effected in several ways. Corporation tax is based on a company’s profits, if the government decide to change how it regulates corporation tax and want to increase its rates businesses would lose out on profit because they’d have to pay the government a percentage of what they earn and this percentage would be bigger if corporation tax rates was to increase.
Social: If population was to change in the future this would affect Tesco, for example if the population in a certain location decreased – sales would then decrease too because there aren’t as many people in the area to purchase Tesco’s goods, this would lead to a decline in profits.
Competitors are also a threatening factor to Tesco because while Tesco are thinking of new and innovative ideas for goods/services to provide, Tesco’s competitors are also…