Accuracy: Prices reduction expectations in supermarkets

With a turnover increase began in 2024. According to the data of the Circana investigation firm, total sales in value in the first month of the year amounted to EUR 825 million compared to EUR 807 million in January 2023. The increase in turnover by 1.8% was not exclusively inflationary as the sales volume of pieces increased by 1.1%, which means an increase of 0.7%. At the same time private label products increased 3.6% by reaching a 27% share of the total market, with the increase coming from food. As far as promotional activity is concerned, the percentage of sales made under supply arrangements increased overall to 25.4% from 22% in January last year. An increase in offers was recorded in food (25%), detergents – cleaners (25.8%), personal care and beauty (29.1%). The figures of Circana also show that price reductions in dairy (-4.4%), personal hygiene (-5%), other household products (-4.1%) and alcoholic beverages (-0.2%). In the opposite price reductions were recorded in snacks (5.1%), cooking materials (3.5%), non-alcoholic beverages, such as juices, soft drinks (3.4%), frozen foods (1.8%) and packaged foods (1.1%). At the same time, the development ministry’s measures have been implemented since 1 March to address the accuracy that appears to lead to an adjustment of the company’s commercial policy. Describing the new situation that has begun to form in the market after two special years with high inflation and energy crisis, Panayiotis Borettos vice president and CEO of Circana speaking to the Athenian Macedonian News Agency notes: “From the messages we have received so far we appreciate that this year will be special as a set of factors affects its course while the measures of the Ministry of Development have been put in place in order to reduce the intensity of accuracy.” As Mr Borettos explains, the upward trend in the supermarket market and in standardized products (fixed barcode) with an increase of 1.8% in value and in weight products or “slice” with an increase of 3.3% in value continues, with consumers choosing increasingly private label products but also smaller packaging to fill their basket. At the same time they increasingly choose small shops up to 400 sq.m. for their purchases, which they are rushing to exploit chains by adjusting their investment plan. Consistent optimism about the progress of the industry For the course of the market throughout the year, Mr. Boretos notes that it is very difficult to draw a safe conclusion. “We expect a change in the orientation of business trade policy, particularly in terms of offers. We also estimate that total sales of supermarkets in value will increase by 3.2% in 2024 compared to 2023 with unit prices rising by 1.7%” he stresses and complements: “The price becomes an increasingly important point of discussion. There is a constant struggle between suppliers and retailers to make their products and their stores as attractive as possible to consumers so that the latter do not hesitate and are less concerned at the point of purchase.” At the same wavelength, the Institute for Retail Consumer Goods Research (IELKA) recorded the views of industry executives on the main sectoral issues and challenges of this year. The investigation was conducted between 15 and 31 January 2024 using a structured questionnaire and a sample of 130 senior and senior business executives (lan trade – supermarket chains and FMCG suppliers) from the general management and marketing, sales, purchases, economics, information technology etc.