Greece’s Organized Food Sector Challenged. Retailers Fear Rev Declines

Greece’s organized food sector is faced with an unprecedented turnaround as a number of retailers expect to close this year with a revenue decline.

According to a major retailer there has been negative inflation in the sector in recent months and that any development must exclusively come from a volume increase. However, as they say this is highly unlikely to happen, taking into consideration the pressure on the consumers’ income, which leaves no room for more expenses.

The new conditions created in the market will put the operating model of each supermarket to a tough test.

Major Supermarkets such as Sklavenitis and AB Vassilopoulos despite having been highly profitable during the pandemic, are not guaranteed the same profitable future with reduced consumer income. The overloaded supermarket trolley should be considered a thing of the past.

Another major question is the neighborhood stores, where a significant portion of consumption has steadily shifted in recent years.

In this category, Masoutis, My Market, Kritikos, and Carrefour have a distinct presence, facing strong competition from players like OK! Anytime Markets.

Efood has also entered the small organized food sector,  through its “efood local” initiative, though not with a directly competitive concept.

Despite their size, all retail chains are faced with difficulties related to the drastic increase of operational costs.

Energy costs, wages, and rents are undermining the efforts of chains to remain competitive and maintain a high level of promotional intensity.

Specifically regarding rents, the lease renewals come with a minimum increase of around 30%, a significant burden even for major players in the industry.