Economic growth is preferred because it helps government and business as well. They can invest in economic by rising taxes that might occurs a higher profits due from growth. Tesco need to pay their staff at the minimum national wages but also increase the wages of those who work for them for a long period of time.First, economics growth is simply, the increase in the gross domestic product (GDP) due to an high aggregate demand and productive capacity. Which is also measured as the rate of change in GDP. Economic growth occurs when people have more money to spend and will spend on thing they not necessarily need. That why business sales increase at the moment includes Tesco’s sales.
Indeed, the rise of income tax may affect Tesco. High income tax means people have less money to spend on expensive products and rather go for the lower price at Tesco. However if the income tax is low, costumer will spend way more on products and services at the stores at they may have more money.
In conclusion, low income helps Tesco achieve their aims which is increasing their profits.Tesco will need to know the available income of most of their customers, by doing for example a market research or questionnaire to they customers. If they income are high, the grocery can charge high prices, and sell higher quality products, If income is low then Tesco will have to charge less money for their products which will not increase their profits.Tesco has been set a corporation tax rate by the government, his means that Tesco will have less money to reinvest into the business. The government has also set a VAT rate, which may reduce the demand for some of Tesco’s products, such as electrical goods, as customers consider them as needed. If the taxes have increase then Tesco will have to charge tax on top of their prices so they won’t loose money.
Minimum wage is a legal requirement that all businesses must pay their employees. The minimum wage now for employees aged 21+ is £7.38. These minimum high wages for may effect with the number of employees the business recruits, which could impact on the quality of customer services. If Tesco doesn’t respect and pay their employees correctly, they are in measure to complain and this may lead punishment and bad reputation for Tesco.Tesco will need to know the economy of every country they in, They need to know the state of the economy of the countries that they are in, The state of the economy in the UK will be different to the state of the economy in Ireland, so they will always have to know when and what is the state of their economy.
Tesco need to consider the recession as the recession means less customers, because they’re less jobs and money in the economy, Tesco will make less sales because there is not enough money in the economy