The current state of the UK economy is strong they have been able to avoid recession in 2008, but there are high employment and uncertainty in the economic conditions UK’s economy will grow 0.2% in 2012 and 2% in 2013.This is a important factor affecting the demand for consumer goods. Regardless of their current financial situation, consumers are more likely to purchase greater amounts of consumer goods when they feel confident about both the overall condition of the economy and about their personal financial future.
High levels of consumer confidence can especially affect consumer inclination to make major purchases and to use credit to make purchases. Economic factors are of concern to Aldi, because they are likely to influence demand, costs, prices and profits. One of the most influential factors on the economy is high unemployment levels, which decreases the effective demand for many goods, adversely affecting the demand required to produce such goods.These economic factors are largely outside the control of the company, but their effects on performance and the marketing mix can be profound. Aldi would be badly affected by any slowdown in the UK food market and are exposed to market concentration risks. The UK has the highest inflation rate among the world’s top economies, in the latest sign Brexit vote is contributing to a squeeze in living standards.
The increased cost of importing food and fuel is pushing prices to rise at a faster rate than than anywhere in the group of leading global economies, according to the Organisation for Economic Co-operation and Development. Aldi has been affected by it because their sales gained 15.6% taking its market share to 6.9%. The grocer has widened its lead on the Co-op, where sales fell for the second month in a row after it sold 300 small stores to McColl’s.In the past three months, almost 63% of shoppers visited one of the discounters, up from 58.5% last year.
Their market share has risen to 12.2%, a surge from less than 10% only two years ago.All the large grocery chains are benefiting as food price inflation, which emerged in January after more than two years of price falls, remains above 3%.
Prices rose 3.2% in the period, partly as a result of the fall in the pound since the Brexit vote. The volume of goods sold also rose, increasing total market sales by 3.6%. The exchange rate in the UK brexit took its toll, with sterling plummeting from £1 to €1.
3 to £1 to €1.16 overnight in the wake of the decision. The exchange rate has fluctuated many times since then, but it’s never recovered to the heady heights of pre-EU referendum rates, and at the time of writing is lagging at an underwhelming £1 to €1.
13. This affected Aldi because the price of foreign currency one pound can buy. If the current exchange rate is two dollars to the pound, then one pound is worth two dollars.The price of UK exports and imports is affected by changes in the exchange rate and aldi business will be affected If the business buys any products from another country. The cost of those products will change if the exchange rate changes.Monetary policy in Aldi business is mainly on interest rates and the cost of money the increased supply of money holds down the interest rates making it easier to borrow money from capital investments the Monetary policy effects on Aldi business is that if they lower the federal funds rate they would see a decrease in their interest rate such as prime rate.
Consumer spending will increase. If the demand for goods and services continues to increase prices may increase for supplies to meet the demand. This aspect of monetary policy plays less of a role than it once did influencing current and future economic conditions.Fiscal policy is when a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy. It is the sister strategy to monetary policy through which a central bank influences a nation’s money supply These two policies are used in various combinations to direct a country’s economic goals. Here we look at how fiscal policy works, how it must be monitored and how its implementation may affect different people in an economy.
Fiscal policy in Aldi business affects their retail business by changing the amount of disposable income people have to spend. Higher taxes, or an expansion of taxable items, lower consumers’ net income, making them more budget conscious and apt to limit expenditures to necessities. Lower taxes leave more money in consumers’ pockets to spend on goods and services retailers offer.