Greek supermarkets: AB Vassilopoulos brand manager emphasizes affordability

Nikos Lavidas, the new head of the Greek subsidiary of the Dutch-Belgian group Ahold Delhaize, has to win the difficult bet to develop AB Vassilopoulos above the market average at a time when people see it as being among expensive chains.

Perhaps the new Brand President’s long tenure in retail (for almost 9 years he held a high position in the management team of Sklavenitis supermarket chain), will help him to overturn this perception, which, as he noted, “is far from reality”.

However, “it is not something easy” because as the Americans also say “perception is reality”, he pointed out at his first meeting with journalists.

Without clarifying whether AB Vassilopoulos holds the second or third place in the top 3 of the domestic supermarket market, the head of the chain attributed the “disadvantage” of consumers considering “AB” as an expensive destination because of the high shopping experience it offers in its stores.

Emphasis on cheaper products

However, the chain is not going to make discounts on quality and shopping experience, but will invest in reducing prices.

It currently offers 850 essential goods covering a wide range of needs at a consistently low price. “Our goal is to reach 1,200 product codes that will be sold at a low price to cover all needs in consumer staples,” added Mr. Lavidas.

These are private label products, as Mr. Lavidas noted, allowing the chain to control costs. He noted that the same logic has been followed with regard to the “Household Basket”, which has been compiled by AB Vassilopoulos and includes 74 products, most of which are PL.

He added that in order to say which is the cheapest or most expensive basket, one would have to compare the same products, which is very difficult because the composition of each chain’s basket has different characteristics.

Steady turnover, pressures on profits

Although turnover this year is expected to remain relatively flat, possibly registering a small increase, which will be purely inflationary, profitability will be squeezed, which is happening across the market, according to Mr Lavidas.

And the reason is the prevailing conditions. He pointed out that the sales volume of the market is decreasing despite the temporary “tourist” breath.

Referring to energy costs, he said that for AB Vassilopoulos it is 2.5 times higher this year (including subsidies).

10 + 50 stores in 2023

However, difficulties will not put a demper on the investment plan of AB Vassilopoulos regarding expanding and upgrading of its network.

In 2023, it is going to invest, as every year, around 60 million euros for this purpose, aiming to create 10 new chain owned stores and add 50 new points to the franchise network.

Regarding the ongoing projects, the new store in Kennedy Square in Halandri is expected to open next month, while the goal is for the large store being prepared on Kifissias Avenue, in Marousi, to be put into operation in the first half of 2023.

Acquisitions

At the same time, the management of the chain is also considering the possibility of acquisitions. However, at this time, any discussions that had started, such as for example with the Gegos chain, have come to an end, as they did not pan out.

In addition, Mr. Lavidas denied the rumor that there are contacts with Masoutis with the aim of cooperation or acquisition.

Investments in online sales

The framework of development and investments would not be complete without e-commerce.

The digital sales channel contributes 3% to the chain’s total turnover and investment plans include the creation of a second dark store, comparable or larger than the AB Home Shop Center, as it has now reached its limits in terms of meeting demand.

During 2022, AB Vassilopoulos’ e-sales growth rate exceeded 20%, according to Mr. Lavidas.

Staff

Regarding the removals of executives recently, Mr. Lavidas replied that a reorganization is being implemented that aims at creating a flexible structure in the administrative sector and does not concern cost reduction.

Mr. Lavidas, however, emphasized that the goal for the future is to increase staff and specifically mentioned that the chain is currently looking for 50 people (30 for the e-shop and 20 for the Stamata store).

For the possibility of wage increases for employees in the midst of inflationary pressures, the CEO said that for this year there is no forecast, however it is something that can be considered next year.

AB Vassilopoulos in numbers

The chain has 592 stores, which “total” 352,114 sq.m. in 231 cities throughout Greece.

Of the total number of stores, 264 correspond to the franchise network, which is the largest in the organized retail sector with a presence in 61 cities/regions.

The storage areas cover 125,000 sq.m.

The AB Home Shop Center, the dark store that has been created for the needs of the online store of AB Vasilopoulos, includes 11,000 codes.

The chain returns 25 million euros annually through the AB Plus loyalty scheme.

Vassilopoulos cooperates with Greek producers, as 90% of codes offered in fresh products are Greek, while the number of suppliers in the chain exceeds 600.

It employs 14,000 workers, having paid €220 million in payroll in 2021 and an additional €23 million in benefits.

It is estimated that 2.2 million customers visit “AB” stores per week.

In 2021, it provided meals worth more than 8 million euros through the Food of Love Program, and runs 98 innovative Recycling Centers (TECHAN).