Food Retail Industry In Spain - Porter's Five Forces Strategy Analysis

The pace of consolidation of Spain's retail food sector seems to be quickening. Medium- sized supermarkets in center city locations are taking market share from both traditional shops and suburban hypermarkets. The top three retail groups now account for just under half of total sales. This competition, combined with the fall of the dollar against the euro, is creating good conditions for U.S. food exporters. Many supermarket chains are looking for new sources for their private label brands and U.S. products are more price competitive than at any time during the past five years.

Aruvian Research analyzes the Food Retail Industry in Spain in Michael Porter's Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.