ECONOMY

Supermarkets fear slump in year’s second half

supermarkets-fear-slump-in-years-second-half

Officials at supermarket chains and their suppliers are anticipating a considerable drop in sales in the second half of the year due to the Greek economy’s entry into a new cycle of deep recession.

The decline in turnover is expected to be so dramatic that it will practically offset the gains the sector’s enterprises have secured this year, especially since late February, which means that 2020 will likely end on a par with 2019.

Supermarket chains, especially those that also have a cash-and-carry network, are suffering significant losses from the suspension of operations in the tourism and food service sectors, which are the main clients of cash-and-carry outlets.

These are the main conclusions of the latest survey by the Research Institute for Retail Consumer Goods (IELKA) that records the views of business officials in the sector. The survey took place between April 1 and 6 and included supermarket suppliers too.

The positive trend recorded in the country’s economy in 2019 appears completely reversed in this survey: While in January 2020 74 percent of respondents spoke of an improvement in financial conditions and only 1 percent said they had worsened, three months later, 65 percent say the economy has deteriorated and just 27 percent perceive an improvement.

The nature of problems the sector’s corporations are facing has changed significantly due to the Covid-19 epidemic. Uncertainty – a common problem during the debt crisis of the 2010s – has re-emerged as the main problem according to 75 percent of officials, while the demand outlook (an issue unseen in the last five years) now ranks second among the sector’s problems as a result of the sudden changes in shoppers’ buying habits.

A third problem is the inability to provide timely home deliveries, as this was an aspect that the market had not expected to come to the fore so quickly and which requires considerable investment for the sector’s companies to respond efficiently to the soaring demand.

Among the priorities the supermarket chains and their suppliers are currently setting, the main one is protecting their staff’s health, while the increase in sales volume, which used to sit at the top of the list, has now dropped to eighth spot. Product availability is their second priority.