New cycle of reorganizations in organized retail

The supermarket industry is entering a cycle of new reshuffles, with several chains exploring more targeted acquisitions, two years after the covid-19 pandemic boosted revenue but also overturned expansion plans. Exploratory contacts are underway, the partnerships are put back on the negotiating table, while Carrefour returns to Greece by the summer, ten years after the French group left the domestic market, with a new partner Retail & More, a subsidiary of the group. AVE. At the same time, inflation, rising energy and transportation costs, rising commodity prices, shortages of basic commodities and declining consumption are drastically changing the chain’s strategy and they anticipate that 2022 will be a special year for industry.

“Retail is a long-term investment but requires vigilance and adaptability,” Konstantinos Macheiras, president of the Consumer Retail Research Institute, told APE-MPE. is not only the maintenance of the dynamics of the pandemic turnover but also the adaptation to the new conditions created by the covid-19 crisis as well as the energy one. According to Mr. Macheiras, retailers need to invest in technology, as well as in the creation of new store models (concepts) that improve the shopping experience and redefine the concept of service.

Describing the Greek retail market as “attractive” for Greek and foreign investors, he estimates that in the coming years chains will be absorbed and other retailers will be added that are not currently in the spotlight by introducing new store concepts in the domestic market. The president of IELKA emphasizes in APE-MPE that fermentations are already taking place with large foreign chains that want to come to the Greek market starting from scratch, not acquiring another company. Focusing on Carrefour’s return to the domestic market, he notes that “it is a new business activity of the French group in Greece with a new partner and a different concept.” I personally believe in the new venture. We should never underestimate any player. I only see the return of Carrefour in Greece positively and I estimate that its return will make the companies in the sector better organized and differentiated. “He also adds that it is a” big name with a strategy “and adds: Carrefour due to past. On the contrary, it will be a positive element in order to improve the other players in organized retail. Markets are dynamic. If you think you’re playing alone, you’ve lost. “This is something that both executives and leaders need to be aware of.”

The challenges of this year

For this year, the first month of the year is sluggish in terms of sales, with price increases on the shelf burdening the housewife’s basket. As Mr. Macheiras notes, from October 2021 there is a decrease in traffic in stores. The last quarter of 2021 did not follow the upsurge of the previous year. This trend continues in January. “I believe that by March, the first quarter of the year, it will follow the same trend of the last quarter of 2020 as it happens over time and historically. So we expect in the first quarter of the year, low growth, marginally positive 1.5 to 2% “If the energy is resolved around April, we may see better or the same growth in the second quarter.”

The president of IELKA estimates that “the third and fourth quarter of 2022 will be much better than the corresponding last year as it will help in this direction the better course of tourism and the reduction of the pandemic.” I believe that if there is no dramatic change According to the data, the second half of 2022 will be much better than the second half of 2021 “, he notes. from the covid-19 pandemic stress “.

Referring to product prices in particular, he said: “We are waiting for a normalization. Suppliers and retailers have turned their backs on this period. “In the first ten days of 2022. If we succeed as an industry and keep price increases below 50% of the European average inflation then we will have done an excellent job. That should be the goal of both retailers and suppliers.”

Mr. Macheiras makes special mention of the need to reduce VAT, noting: “Personally, in recent years I have been calling for a reduction in VAT on basic food codes, knowing that in times of crisis (memoranda, covid, etc.) is not a priority for governments, where the budget is specific and limited. 50% of the European average inflation, to the detriment of companies’ temporary profitability but in favor of increasing consumer confidence in companies in the long run “.

New regularity the electronic supermarkets

As e-commerce is a new regularity for the industry, all the big supermarket chains, except Lidl, but also the medium ones have an electronic sales channel. According to the data of Convert Group, in the nine months January-September 2021 the sales of electronic supermarkets increased by 117% compared to the corresponding period of 2020. Also according to the data of Convert Group, the turnover of electronic supermarkets in The first half of 2021 was around 140.6 million euros, an increase of 122%, while in 2020 their turnover is estimated at 163.8 million euros.

As Mr. Macheiras notes, electronic sales in food (e-grocery) will have low growth and will remain at 3% of the industry, close to 300 million euros for 2022. “This percentage does not correspond to the capacity of the industry It will return to growth in 2024 reaching 5% “says the president of IELKA in APE-MPE and adds:” This year will give retailers time to improve their weaknesses and their services by responding directly to the demands of consumers and “Customers should be informed and choose the right products at the best price. It takes time to adjust and improve services for all retailers in the online store. They will either respond or remain spectators.”

Source: AMPE