Supermarkets engage in investment rivalry
Supermarket chains’ investment programs concern four main fields as they are aimed not only at increasing turnover but also expanding profit margins, which have been shrinking over the last few years. These four areas are online commerce, the operation of new stores and distributions centers, promotional activities and differentiation in products and purchase experience.
The limited increase in households’ disposable incomes and the shift of consumer behavior toward value-for-money purchases create the need for large as well as astute investments in the sector. The market expects growth in turnover to stay below 3 percent this year compared to 2018.
In this context, after four years of major concentration moves and shutdowns, the sector has this year abandoned the strategy of market restructuring – at least for the time being.
Market leader Sklavenitis splashed out 59 million euros in 2018 to absorb and renovate Marinopoulos supermarkets and is planning a similar investment for this year and next combined. AB Vassilopoulos is sticking to its plan of investing 70 million euros per year, and Lidl Hellas has already spent 120 million in 2019.
