Pest Analysis of The Retail Industry Free Essay Example

PESTPoliticsIt is much simpler to trade with other European Union countries rather than with countries outside of the EU. Within the EU goods are free in circulation meaning the UK can trade with other EU countrieswithout any restrictions.With Corporate social responsibility being increasingly more important many companies are advisedto have an environmental management plan. This helps to minimize the company¶s eco-footprint andencourage green business practice.To encourage companies to reduce the environmental impacts of their retail outlets, a law ( theEuropean Union¶s Energy Performance of building Directive (EPBD)) was passed in 2009.

Companies are encourages to adopt these measures to avoid receiving hefty fines.EconomicRetail prices have a tendency to fall during periods of inflation. During 1996 to 2000 the UKsconsumer price index for clothing and footwear fell by 7%. The largest sector within the retail industry-women¶s outerwear saw prices decline by 16% over 5 years.In 2000 consumers spent ?34.15billion on clothing and footwear. However, as a share of consumer spending it decline from 6.

3% to 5.8%.Competition, price and low cost labour all play a major factor in higher imported share of the market.The use of cheap labour has always been an aspect in manufacturing clothing.The range of countries that export into the UK has developed and has become even broader. Tradingfrom Hong Kong, China and India has become even more popular. SocialWomen spend more than 8hours of their lives shopping. They also make more than 90 trips a year tokeep up their appearances, with a total of 100 hours and 48minutes spent hunting for the latestclothing bargains and fashion statements.

Seasonal factors also play a part in how consumers spend. Many new lines are brought into storesseasonally; however there are items for e.g. jeans that are brought all year round. During the winter/autumn months stores build-up to the Christmas period, usually adding new lines or additional itemsthat can be sold as Christmas presents.TechnologyTechnology has played a major role in the way people now shop. Many consumers like to shop onlineas well as in store. This has changed the retail industry dramatically. Last year the online retailindustry grew by 14% and is continuing to thrive. During the Christmas period in 2009 the onlineindustry saw spending increase to ?5.46billion a whole 17% more than the previous year.