Dramatic drop in food retailing


Greeks have been repeatedly forced to cut back on food consumption since the outbreak of the crisis, as last year’s 4 percent drop in food retailing took the total decrease in market turnover from 2009 to 2016 to 18 percent, according to data compiled by Nielsen researchers.

Last year’s decline was not only brought about by the further decline in demand, but also the special conditions in the sector created by mergers, acquisitions and the restructuring of enterprises, with Marinopoulos being the most prominent example.

The Nielsen data also show a major trend toward concentration in the sector that the researchers estimate is set to continue in the next few years, while this year food retail turnover is projected to shrink by a further 2-3 percent compared to 2016.

Last year the sales value of food retailing – including small grocery stores – amounted to about 10.78 billion euros, down 4.1 percent from 2015. In effect that means the industry went back 11 years, to 2005, though that was a period when food was burdened by far lower indirect taxes and disposable income was spent on many other commodities and not primarily food consumption, as is the case today.

In 2009, a year before the country entered the bailout process, food sales reached their historic peak, totaling 13.15 billion euros. The crisis and the ensuing fiscal adjustment measures had a big impact on demand, resulting in the vital restructuring of the sector, with many small sales points and even supermarket chains shutting down.

Therefore, while the 10 biggest food retailers accumulated 65.7 percent of the category’s total turnover in 2005, the share of the top-10 companies has soared to about 76 percent today. Compared to 32,000 in 2005, the number of small food retail stores had declined to 27,000 in 2015.

Major food retailers (i.e. stores of at least 100 square meters) saw their sales value drop to 9.49 billion euros last year from 9.9 billion in 2015, which is a 4.5 percent fall. If the impact of the Lidl discount supermarket chain were deducted from the statistics, that drop would amount to 6.6 percent.