Economic Factors to Consider for Target in the United Kingdom Essay

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Target in the UK: Economic factors to consider for Target in the United Kingdom

The American general retailer Target is considering expanding into the UK in the near or far future. The UK has several potentially attractive features for the American retailer, namely an English-speaking populace and recent GDP growth. "The Bank of England forecasts that Britain's economy will grow by 3.5% this year, which would be its best rate of growth in around a decade, given recent downward revisions to growth in the run-up to the financial crisis" ("UK consumer confidence," 2014). However, despite this fact, British consumer confidence appears to be declining, rather than increasing. "British consumer morale edged down from a recent nine-year high this month as households became slightly less upbeat about the outlook for the economy and their personal finances, a survey from researchers showed" ("UK consumer confidence," 2014).

The UK discount market is extremely competitive at present, partially as a result of this declining confidence.
Asda, the UK arm of the Wal-Mart conglomerate, has been forced to slash its prices to stay competitive: "Asda was the first of Britain's so called big four grocers…to counter the threat posed by discounters Aldi [ALDIEI.UL] and Lidl [LIDUK.UL] by cutting its own prices" (Davey 2014). It does not bode well for entry into the UK market that "British consumers are shopping around for the best prices, buying little and often and wasting less" (Davey 2014). This is despite the fact that inflation is at historically low levels. "The rate of UK inflation fell to 1.2% in September, its lowest rate for five years, pushed down by lower energy and food prices" ("Economy tracker," 2014).

In terms of its national debt, the UK is actually heading in a relatively positive direction. While objectively speaking, in terms of its current rate, "although 77% of GDP is a lot, it is worth bearing in mind that other countries.....

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