Industry War – ‘Energy Benefit’ Supermarket – All In The Background

By George Lampiris

New morals seem to be brought to the market lately by the energy crisis. This is because as they characteristically state in Capital.gr Absolutely valid and cross-referenced information, one of the largest supermarket chains has asked its suppliers to pay an additional amount as a supply, so that the company can cope with the sharply increased energy costs. It is a multinational displacement supermarket chain, whose purchasing management – which chooses which products to put on its shelves – has contacted individual industry executives and is seeking an “informal” subsidy. is to reduce the blow it has received mainly from the particularly energy-intensive refrigerators of its stores as well as from other infrastructures that consume the currently expensive electricity.

Amounts from 1% up to 2% of the turnover of 2021

In fact, the amounts that this chain is supposed to ask for amount to about 1% -2% of the turnover recorded by the specific companies in 2021. This move has brought significant reactions from the industrialists, several of whom have expressed significant objections and objections to this requirement. In fact, as we are informed, there are cases in which the specific chain, when its request is not met, warns that it will download from its shelves or refrigerators, product codes from companies that refuse to respond to the provision of the “energy allowance”.

Immediate application of price increases on the shelves

At the same time, however, this chain and almost all supermarkets – with few exceptions – immediately pass on the increases that come on their shelves from the industry to the final consumer, in order to be under as little pressure as possible from the wave of strong price increases. that shakes the market. In fact, this company was one of the first to start recording the price increases in its stores, as soon as the cost factors began to be affected as early as 2021.

And a second big player is asking for extra benefits

In response to this initiative, another large company of Greek interests, as we are informed, came to ask its suppliers to contribute to the retention of prices that it has carried out so far, which has also caused significant disruption within the market. This company and one of the largest supermarket chains in the Greek market, asked the industry to offer benefits, in order to compensate for the pressures it is currently receiving.

All of the above are taking place at a time when last April had an impact on sales by volume in supermarkets at a rate that is estimated to have reached -8%. This is a negative development that clearly reflects the magnitude of the pressures currently being put on organized retail.

Strong sales growth in supermarkets over the past two years

However, we must remember that in 2021 the Greek supermarkets closed even more upwards compared to the already strong upward 2020, being essentially one of the branches of Greek business that was significantly favored by the new conditions of the pandemic.

In particular, last year the turnover of Greek supermarkets was 7.95 billion euros from 7.9 billion euros in 2020, increased by 0.65. Indicatively we mention that in 2020 the turnover of the chains had increased by 9.7% according to data published by NieslenIQ.