March drop in supermarket turnover reflects pessimism

Supermarket sales nosedived in March, recording the biggest annual decline since September 2014 and reflecting the negative mood among consumers just weeks after the new government was elected to power.

A report by market researchers IRI showed that sales in March dropped 5.2 percent compared with March 2014, following a period of slowdown in the reduction rate and a small increase in February, for the first time since last summer.

It appears that the optimism generated by a change in government lasted no more than a month. Consumers seem to have expected the new administration to reach a swift agreement with the creditors that would have led to a lightening of the tax burden and salary increases. Instead, from March onward, they entered the stage of disillusionment and started to contain their expenditures, even on basic goods such as supermarket purchases.

The abrupt swing from optimism to pessimism is also reflected in the consumer sentiment index recorded by the Foundation for Economic and Industrial Research (IOBE): It declined by almost 10 points in just one month, from -31 in March to -40.5 points in April, putting Greece back at the top of the European Unions’ pessimism list.

Negotiations with creditors have repeatedly been shown to affect the course of supermarket sales. The last big nosedive had been recorded in September 2014, with sales declining by 6.5 percent from a year earlier. In September 2014 the previous government had engaged in tough talks in Paris, with an agreement seeming particularly difficult. In January sales were neutral and in February they posted a 2 percent rise from February 2014.

In total, sales at supermarkets posted a 1.1 percent yearly decline during the first quarter of the year in terms of value and 1 percent in terms of volume, with the general level of prices remaining stable. A year earlier sales value had posted an annual decline of 2.6 percent. The slowdown to the rate of decline seen this year is attributed to the positive performance of January and February but it is not at all certain that this trend will continue for the coming quarters, given the figures for March.

March is generally a month of medium to high consumption, with March 2013 having the lowest annual decline among all the months of that year (0.4 percent). Especially this year, with Easter coming earlier, March should have seen a better result for supermarkets.

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