Explain one influence on the choice of suppliers for a large discount supermarket.

One factor that will influence the choice of supplier by a large discount supermarket will be the ability of the supplier to supply goods at a suitably low purchase cost to enable the supermarket chain to offer cheap prices to store visitors. Discount supermarkets such as Aldi and Lidl position themselves in the supermarket industry by offering consistently lower prices compared with mainstream chains such as Tesco and Sainsbury's. In order for them to be price-competitive (as well as achieve acceptable gross profit margins at the checkout) discount supermarket suppliers will need to operate at a high scale and efficiency which means they can afford to supply at low-cost as well as make an adequate return themselves. This will probably mean that a discount supermarket will tend to buy from larger suppliers who can afford to offer low prices rather than smaller suppliers whose unit costs will be too high.

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Answered by Belen M. Business Studies tutor

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