ASDA Stores Limited is a retail chain supermarket and petrol station British multinational company. Sir Noel Stockdale, Fred Asquith, and Peter Asquith founded the retail chain supermarket brand in 1949. The company has established a network of approximately 829 supermarket stores in various countries across the globe. Today, we’ll discuss the PESTLE analysis of ASDA; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting ASDA
Some of the main political factors in the ASDA PESTLE analysis are as follows;
I-Import and Export Policies
ASDA is a retail chain supermarket brand and the company imports and exports thousands of products as a part of its daily regular operations. The change of political government or the introduction of new import and export policies would directly impact the business operations, availability of product material, and ultimately sales and profitability.
II-Political Instability
The stable political environment of the country plays a key for the smooth functioning and operations of the retail chain supermarket brand. For instance, the lockdown, roadblocks, riots, political processions, and other conflicts would jeopardize the supply chain and distribution network. As a result, the company won’t receive the products and goods on time, which decreases the sales, customer satisfaction level, and sales.
III-Brexit Deal
The Brexit deal has allowed Britain to get out of the European Union. On the other hand, ASDA is a British retail chain supermarket brand. Brexit has caused a shortage of labor, raw supplies, material, and imposition of tax and duties for the flow of goods across Europe.
Economical Factors Affecting ASDA
Some of the main economic factors in the ASDA PESTLE analysis are as follows;
I-Inflation Rate
The inflation rate is one of the main economic indicators and it directly impacts the purchasing power of individual consumers. The inflation rate would cause the prices of products and goods to go up. The sudden increase in prices makes ASDA’s products unaffordable to the target customers of the company. People won’t buy the products when they’re out of their purchasing power.
II-Interest Rate
The interest rate is another economic indicator and it impacts the consumer spending habit. When the government or the economy increases the interest rate, they encourage customers to save their capital resources instead of spending. However, it becomes highly difficult for businesses to take business from banks due to higher interest rates.
III-Exchange Rate
ASDA is operating its business in various countries and in various currencies. The currency exchange rate directly impacts the profitability of the brand. For instance, the currency value of British Pound is higher than the USD. When the retail chain supermarket brand brings the sale back to the country, then it negatively impacts the sales, revenue, and profitability of the brand.
Social Factors Impacting ASDA
Some of the main social factors in the ASDA PESTEL analysis are as follows;
I-Online Shopping Trends
The online shopping and home delivery service trends have increased significantly since the pandemic crisis. Nowadays, customers prefer to shop online and order home delivery, instead of physically visiting the brick-and-mortar store of the company. The growing trends compelled the retail chain supermarket brand ASDA to build an online store.
II-Self-Service and Other Trends
Self-service is the other shopping trend growing in the brick-and-mortar stores. ASDA has changed the entire physical layout and store setting of the brand to keep up with growing customer market trends. It makes shopping simpler and easier and saves a lot of their time.
Technological Factors Affecting ASDA
Some of the main technological factors in the ASDA PESTEL analysis are as follows;
I-Data Analytical Tools
ASDA is investing a significant amount of capital resources in data analytical tools and technology. It allows the retail chain supermarket brand to accurately predict the customer’s shopping trends; and rightly order the inventory for the upcoming to avoid delays and reduce the dead inventory cost.
II-E-commerce Platform
ASDA has also invested a significant amount of resources in the development of online stores and e-commerce platforms. It allowed the company to increase its online orders and sales; and offered the home delivery service to keep up with industry trends and increase the customer satisfaction level.
Legal Factors Impacting ASDA
Some of the main legal factors in the ASDA PESTEL analysis are as follows;
I-Regulatory Compliance
As a retail chain supermarket brand, ASDA should comply with the food safety and health regulations of the country. Government regulations are very strict for retail chain stores to ensure the health and safety of consumers. The non-compliance would not only jeopardize the company’s reputation, but also attract heavy lawsuits, fines, duties, and penalties.
Environmental Factors Affecting ASDA
Some of the main environmental factors in the ASDA PESTEL analysis are as follows;
I-Environmental Sustainability
The consumer market has become highly cautious about the environment and the source of the food and items they’re using. ASDA should comply with environmental sustainability regulations, and make sure that its suppliers are sourcing the products and goods ethically and responsibly. Otherwise, they would start the ban campaign over social media platforms, and soon customers would stop visiting the store and ordering products online.
Conclusion: ASDA PESTLE Analysis |PESTEL Analysis of ASDA |External Environmental Analysis of ASDA | Strategic Analysis of ASDA
After an in-depth study of the PESTLE analysis of ASDA; we have realized that ASDA is the leading British retail chain supermarket and petrol station brand. If you are learning about the ASDA PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
