ECONOMY

Clouds gather over supermarket sector

Having begun in the summer of 2010 with the Atlantic chain?s application for protection from its creditors and then confirmed by the departure of German discount chain Aldi from Greece, these troubled times for the supermarket sector appear far from over.

While the economic crisis alone may not be the cause of the decisions made by the two abovementioned firms, it certainly precipitated developments as it has contributed majorly to the drop in demand at supermarkets.

On August 2 an Athens court formally declared Atlantic bankrupt. A few months ago, meanwhile, Carrefour-Marinopoulos went ahead with a radical restructuring of its executive team by giving the management of the chain back to the French, as it had been when Carrefour first ventured into the Greek market.

In the first half of 2011, Carrefour-Marinopoulos recorded a 6.8 percent drop in sales in comparison to the same period last year, while its plans to launch its Carrefour Planet hypermarket initiative in Greece, originally set for the beginning of 2011, have been put on ice.

The knock-on effect of the drop in demand, moreover, has created friction between supermarkets and their wholesale suppliers as delays in payments from the former to the latter increase, in some cases reaching up to 12 months.

In one example, a well-known food company stopped supplying a large supermarket chain until it made good on its payments. The same supermarket chain has also been accused of failing to pay for maintenance work carried out at its stores.