Greece’s large and medium-sized supermarket chains have entered a special offers war in a bid to secure the biggest possible market share of a pie that keeps shrinking.
According to a survey by IRI, the competition is so intense that their spending on advertising is greater than that of car dealerships in Greece or the even banking sector, which until recently were dominant.
The effort to woo Marinopoulos customers and the realization that the Greek market still has margin for more special offers, as their share in total sales volume remains low compared to the rest of Europe, are the main motivators in the promotional drive.
In the 12 months from July 2015 to June 2016 there was a marginal increase of 0.1 percent in the share of special offers in food sector turnover compared to a year earlier. Estimates say that the increase would have been greater had the Marinopoulos chain – Greece’s largest – not crumbled this year.
The IRI study for the period from July 2015 to June 2016 showed that the sales volume of special offers in the food category accounted for just 18.9 percent of all food sales, which is the smallest rate among the countries examined by the research company. However, outside the food category, special offers are much more popular in Greece: The sales volume of special offers in non-food commodities amounts to 32.2 percent of all non-food sales.
In Greece the product category where special offers hold the biggest share is household goods (detergents, paper rolls etc), where they account for 35.1 percent of all sales. The corresponding figure for personal hygiene goods is 30.7 percent. Meanwhile, in the food and drink category, most special offers concern non-alcoholic beverages: The sales volume from special offers in that category accounts for 24.1 percent of total sales.
Although Greece remains a developing rather than mature market in terms of special offers, the main reason for the appearance of more, bigger discounts and for retailers pressuring suppliers to fund those offers is winning over the customers of Marinopoulos. These shoppers have been branded discount hunters and the majority – estimated at 250,000 – have chosen the market’s leader, AB Vassilopoulos.
The big offers in big brands have recently diminished the gap between their prices and those of the supermarkets’ private labels. However, if the suppliers try to resist the pressure by the supermarket chains, the latter have other strategies to convince them: The IRI study shows that retailers are now engaging in promotional offers even for their private-label products, either by price discounts or by quantity increases.