The Competitive Environment (Edexcel A Level Business): Revision Note

The UK confectionery market shows a high level of concentration

• The top five multinational firms control around 47.96% of the UK confectionery market

• Major players include Mondelēz, Mars, Nestlé, Ferrero and Lindt & Sprüngli

• This means nearly half of all confectionery sales are made by just five businesses

This level of concentration gives large firms significant market power, but rivalry between them remains strong because growth is limited

Chocolate accounts for around 70% of UK confectionery sales by value

Competition is especially intense in:

• countlines

• sharing bags

• seasonal products (Easter and Christmas)

Brands such as Cadbury, Galaxy, Mars and Kinder compete heavily through promotions and shelf space

The sweets segment is smaller but highly competitive

Haribo holds around 22.6% of the UK sweets market, making it the clear market leader

• Other brands, such as Skittles and Maoam, compete through flavour innovation and branding

In confectionery, competition is often non-price based, because constant price cutting can damage margins

Businesses compete through:

• strong branding and advertising

• emotional marketing linked to treating and gifting

• product innovation and limited editions

• seasonal ranges and special packaging

For example, Cadbury and Mars invest heavily in Easter and Christmas ranges to protect sales during key periods

The UK biscuits market is also highly competitive, but competition is spread across a larger number of brands and product types

• The market is dominated by firms such as pladis (McVitie’s), Mondelēz (Oreo, belVita), Fox’s Burton’s Companies and Lotus Bakeries

• Supermarket own-label biscuits are particularly strong competitors in everyday segments

Unlike confectionery, biscuits are often bought as part of routine shopping, which increases price competition

Recent data shows that:

• Sweet biscuit sales values have increased by around 2–3%

• However, sales volumes have fallen by over 3% in some years

This means competition is increasingly about:

• protecting sales volume while prices rise

• using promotions carefully

• encouraging consumers to trade up to premium biscuits

Brands such as Fox’s and LU have achieved growth by focusing on premium positioning and new flavours, rather than low prices

Supermarket own-label biscuits are a major competitive force

• Own-label products often undercut branded biscuits on price

• They appeal strongly to price-sensitive families

• During the cost-of-living crisis, own-label gained market share in everyday biscuits

This increases pressure on branded producers to:

• justify higher prices through quality or branding

• rely more on premium and indulgent ranges