Food retail will post a 1.9 percent annual drop in turnover this year and a further shrinkage of 2 to 4 percent next year, according to the estimates of the Research Institute for Retail Consumer Goods (IELKA). If this forecast proves correct, then the sector will see turnover slide in 2016 for an eighth consecutive year.
The capital controls, the negative mood of consumers due to the economic and political developments since end-June and the increase in value-added tax on many products have seen any gains registered in the first half of the year evaporate.
The further shrinking of turnover will accelerate the restructuring of the supermarket sector, with firms likely to shut down sooner and a major impact on employment. Kathimerini understands that the Carrefour Marinopoulos chain has decided to shut down 20 of its outlets, most of them Carrefour Express minimarkets.
The reduction in turnover for this vital sector also entails a decline in state revenues. According to the IELKA analysis, the VAT hike on many food commodities has already led to a drop in consumption, resulting in a 14-15 percent decline in the expected state revenues from VAT for this year, amounting to 90-100 million euros.
Worse, after the market stabilized in the latter part of last year and started growing in the first few months of 2015, food retail is set to continue shrinking in the rest of 2015 and into 2016, despite being more resistant to pressure than other sectors.
In the first half of the year sales had grown 1.25 percent year-on-year. Shoppers resorted to panic buying in the first week after capital controls were imposed, leading to a 30 percent rise in turnover for that period and a 6 percent increase for the whole of July. In the second half of 2015, turnover is expected to show a 5 percent annual decline, leading to a 1.9 percent overall decline this year. The Christmas period could be decisive on that front, as that is when about 10 percent of the year’s purchases are made.