J Sainsbury plc popularly known as Sainsbury’s is a company founded and based

in United Kingdom. Apart from being rated as one of the top UK retailers,
Sainsbury’s is relevant to the UK economy as it offers and delivers products and
services administering basic human needs like food, clothing, and shelter which is
why I have chosen this organization.

The company operates through Retailing and Financial Services – the company’s
brands include Sainsbury’s groceries, Argos, Tu, Sainsbury’s Home, Sainsbury’s
Bank and Habitat. The retail segment is engaged in the operation of supermarkets
and convenience, and the financial services segment includes the operations of
Sainsbury’s Bank plc - Sainsbury’s Bank (Trading Economics, 2022). Also,
according to Global Data (2022) it is also involved in the property development
and real estate business.

Global Data (2022) states that the Number of Sainsbury’s employees are 117,000,
its Market Capital at $6.0B, Net Profit Margin of year 2021 at -284.6%, and
Revenue for the year 2022 is at $41.1B. Sainsbury’s still retaining its position as
the second largest grocer in United Kingdom, after Tesco.

In relation to business, the external environment comprises of those elements that

operate outside the firm - competition, government, customers (Blythe J, 2015).
Moreover, the environment according to David N. (2010) is defined as the
environment comprising all factors that exist outside the business enterprise but
interact with it.

The external environment consists of two further divisions: factors close to the
organization (called the micro-environment), and those factors common to society
(the macro-environment) … the macro-environment might include such factors as
government legislation, foreign competition, exchange rate fluctuations or even
climatic charges (Blythe J., 2005).

And since the focus of this assessment is on external environment, it is often not
susceptible to direct control; hence the best that can be done is to influence some
elements of it, and to react in the most appropriate ways to avoid the threats and
exploit the opportunities it presents (Blythe J., 2005).

A relevant theory or framework for the analysis of external environment is the

PEST analysis. It comprises of four types of environmental influence, and these are
identified below.

Political environment, this covers the nature of the political system and how that
influences business (Needle D., 2015). For example, Grocery sales remained
significantly above pre-pandemic levels, reflecting a sustained shift of
consumption in-home, and were 0.2% year-on-year but up 7.6% on the previous
year, and in line with the reduction of government restrictions during year 2021,
sales were stronger in the first half, and moderated in the second half. According to
Mattinson, A. (2022), its grocery business delivered a strong volume market share
performance, supported by its value investments for customers as it inflated prices
behind the market and key competitors on high volume line.

Economic Environment, this includes issues of economic structure, such as the

proportion of the economy devoted to manufacturing, services, retail and the like
(Needle, D., 2015).
According to the detailed ratio analysis of the mentioned organization, it is
observed that Sainsbury also faces huge business losses in the 2020 financial year
due to the pandemic period.
The figure below represents the financial overview of Sainsbury over the six
financial years. As per the annual report of this organization, Sainsbury also
experiences significant business losses in the 2021 financial year due to the
business losses in 2020 and it reduces the overall sales volume of this enterprise by
0.3% (about.sainsburys.co.uk, 2021). However, while comparing those financial
statements with Tesco PLC, it can be considered that Sainsbury faces minimal
business losses from the financial perspec- tive compared with Tesco PLC (G.
Naveen Kumar et al. 2022).

(G. Naveen Kumar et al. 2022).

Socio-cultural environment, the cultural values of a particular society have an

influence on business strategy and practices, influences resulting from the
changing composition of the population such as an increase the in the proportion of
the older people or changing attitudes in employment to gender issues (Needle D.,
(2015)

Technological environment is the influence of new or changing technology on

strategies, work practices and jobs, and a major change in this respect has been the
impact of information and communication technology (Needle D., 2015) For
example, The SmartShop Pick & Go solution is available at a convenience format
Sainsbury’s store in Holborn, London. Visitors have to scan a QR code on their
SmartShop app when entering the store and again when leaving, customers will
then be charged automatically via the app for the items they’ve selected (Carroll,
N., 2022).
A fleet of five zero emission bikes is been set off across South London from the
Streatham Common store, delivering up to 100 orders a day to local customers
who’ve shopped through the retailer’s groceries online website. The trial
demonstrates Sainsbury’s mission to deliver for its customers whenever and
wherever they do their shopping (Sainsburyarchive.org.uk. 2022)

References

Tradingeconomics.com (2022). Sainsbury's | SBRY - Stock Price | Live Quote |

Historical Chart. [online] Available at: https://tradingeconomics.com/sbry:ln
(Accessed: 20 July 2022).

Globaldata.com (2022). ShieldSquare Captcha. [online]. Available at:

https://www.globaldata.com/company-profile/j-sainsbury-plc/ (Accessed 20 July
2022).

Fraser McKevitt (2022). Shoppers get ready for Platinum Jubilee despite highest
grocery price inflation since 2009. Kanter Group and Affiliates. Kanter.com
[online] Available at: https://www.kantar.com/inspiration/fmcg/shoppers-get-
ready-for-platinum-jubilee-despite-highest-grocery-price-inflation-since-2009
(Accessed 20 July 2022).

Blythe, J. (2013). Principles and Practice of Marketing. United Kingdom: SAGE

Publications.

David Needle (2010) Business in Context: An Introduction to business and its

environment (Fifth Edition) Cengage Learning EMEA pp. 51-52.

Blythe, J. (2015) Essentials of Marketing (Third Edition) Pearson Education

Limited. Pp.22-23.

Mattinson, A., (2022). City snapshot: Sainsbury’s warns of inflation impact

despite soaring profits. [online] The Grocer. Available at:
https://www.thegrocer.co.uk/results/city-snapshot-sainsburys-warns-of-inflation-
impact-despite-soaring-profits/666973.article [Accessed 20 July 2022].
Dr. G. Naveen Kumar, Dr. Podapala Siva Reddy, and Mulupur Sai Rama Krishna
(2022) BOHR International Journal of Finance and Market Research 2022, Vol. 1,
No. 1, p. 38. Available at:
https://doi.org/10.54646/bijfmr.006 (Accessed: 20 July 2022).

Carroll, N., 2022. Sainsbury’s reveals SmartShop Pick & Go format. [online]

Mintel. Available at: https://www.mintel.com/blog/retail-market-news/retail-
watch-sainsburys-reveals-smartshop-pick-go-format [Accessed 20 July 2022].

Sainsburyarchive.org.uk. 2022. Timeline. [online] Available at:

https://www.sainsburyarchive.org.uk/timeline/152 [Accessed 20 July 2022].