Political and Legal Factors

Political and Legal Factors

As Thomas (2007) suggests politics is focus on government's work, it may affect the product line via some government policies. In recently, UK's Food Standards Agency released a statement that an EU-wide health warning must be put on any food or drink which contains the colours may cause hyperactivity in some children (Alicia, 2010). Asda put a health policy on its website to announce there is none any artificial colours or hydrogenated fat in its 'smart price' food which may be though unsafe about its quality by its low price (Asda, 2010).

In additional, UK government's Department for Environment, Food and Rural Affairs (Defra) and Department for International Development (DFID) has taken on the policy to balance future demand and sustainable supply of food industry (National Archives, 2011). The government policy hopes food industries can put more attention on a sustainable development and an adequate stability in food prices. Looking back to Asda's 'smart price' food range, they do keeping follow UK government's requirement and gaining food by using its pioneering partnership Cumbrian food hub, Plumgarths (BBC GOOD FOOD, 2012). Asda use its nine hub network to open a door for these small business who normally wouldn't have the opportunity to deal with a major supermarket. Their action in holding a sustainable supply of food from local food producers has made Asda gaining equivalent reputation from both government and local resident.

Economic Factors

The economic factors are entwined with consumers' spending and companies' pricing. According the economic recession from 2008 UK's economy has been affected. The Office for National Statistics (ONS) (2012) states the gross domestic product declined by 0.3% in the first three months of 2012. ONS (2008) aslo analysed the CPI from 2005 to 2008 which shows the CPI of food and non-alcoholic being a distinct rising trend. It links to Department for Environment, Food and Rural Affairs' analysis result that low income household reduce nearly 30 percentage of spending on vegetable and fruit (Defra, 2010). Under the pressure of income, 'smart price' food and other special price food become a reasonable choice for them. The statistics shows asda bananas and smart price apple becoming a substantial choice for these lowest income household (WCRF 2012).