Changes in Polish trade are accelerating, which is the result of a record increase in prices for basic food products. Butter, flour or meat rises in price by 40-70 percent every year. Consumers are increasingly scrutinizing offers, especially promotional offers that reward the strongest market players.
Consumers are increasingly saving
The GfK Consumer Moods Barometer was -14.2 in April, down 2.2 percentage points. compared to March. We have underestimated the current and future financial condition of both our budget and the economy as a whole. In turn, according to a survey by NielsenIQ Shopper Trends 2022, 34 percent. Twenty-two percent of those surveyed are worried about rising food prices. o increase in utility costs. As a result, 60 percent of cosmetics and household chemicals in the food category, more, that is, plans to save about 70%. These are the highest percentages in the years when the pandemic occurred in 2020 and its duration was much higher than in the past. Thus, it is clear that the current crisis will have a stronger impact on consumer decisions than ever before.
Nielsen IQ analysts say it can be expected that networks and channels that meet consumer needs will benefit in terms of low prices and promotion. “However, we are far from declaring an absolute price advantage,” said Beata Kachzorek, NielsenIQ’s director of consumer research.
– Price and promotion factors are important, but we must still remember that quality, time savings and convenience are important for the consumer. It’s a good time to promote loyalty programs, adds Konrad Wacławik, director of retail relations at NielsenIQ.
This will accelerate the market trends in 2021. According to GfK Polonia, in 2021 only the turnover of discount stores and local supermarkets will increase, while others, such as traditional shops and hypermarkets, will decrease.
– Strengthen strategies and communication around discount chains, low prices and deep promotions, taking advantage of the vast opportunities of about 5,000 stores and Tesco’s exit from Poland, as well as pulling some consumers out of specialty stores, especially pharmacies, by 12.3 percent in 2021. The cost of purchases – says Szymon Mordasiewicz, commercial director of GfK Polonia Household Panel. – Local supermarkets have grown by 3.6 percent, taking advantage of the similarity and proximity to a relatively wide range. – adds.
Discounts against others
Discounts – Netto, Aldi, Lidl and Biedronka chains – were already responsible for 38.8% by the end of 2021. Purchase value of Polish households and local supermarkets represented by Dino or Delikatesy Centrum, listed by Eurocash Group, 13.2 percent. According to GfK, both formats increased their joint market share by 3.2 percentage points.
Such results are a great success, as at the same time the entire FMCG market gained only 3.2 percent. The trade situation is more complicated this year. – In April, inflation reached 12.3 percent, and fuel and energy prices rose by about 28 percent. – and these are the main cost items to run a grocery store. Inflation, on the other hand, is hitting local shopkeepers through their customers’ wallets – food and non-alcoholic beverage prices are rising faster than inflation – up 12.7% in April. yy. – says Jan Domański, a spokesman for Eurocash Group, which manages networks such as Delicatesy Centrum, Lewiatan, Groszek and ABC. – The largest sales volume is carried out by local and modern managed branches, combining tradition and innovation. In the eyes of the consumer, local stores win with the main distinguishing feature – proximity, the offer of regional products and the availability of a wide range of fresh products.
The war struck a chord
Some online sales sites declined in March, but the industry is expected to continue to grow for several years.
The Dino network, which has seen an increase in turnover and continues to develop its network of stores, also benefits from the same approach to the customer. It opened 66 new stores in the first quarter, bringing the total number of customer visits to 32%. Compared to the first quarter of 2021 and the increase in turnover reached 39.6%, 3.85 billion PLN, similar to sales, ie a 20.4% increase in stores that have been available for more than a year
“The rapid increase in the scale of operations opens up many opportunities for us and brings us closer to the goal set by 2022, which is to open more new stores by 2021,” said Michał Krauze, a board member of Dino Polska. .
More changes are coming
The market must respond to the rapid development of discount chains, as this market segment is developing the fastest.
“The growth dynamics of discounts will slow down, but there is still room for more than a thousand stores in this format on the market,” said Maciej Bartminski, president of research company MarketSide. According to the report, in 2021, a discount store in Poland will have 7.9 thousand people. In 2011, there were 14.8 thousand people. Nation. – Taking into account only the urban population and discounts in cities, at the end of 2021, this figure was 5.3 thousand people. residents. For comparison, in Germany, the largest discount market in Europe, one discount store has about 5,200 units. residents – adds Bartmiński. The company expects that in ten years the number of discounts will exceed 6,000, which will give them more than 50%. market share.
Crazy prices, which increase by 60 or 80 percent every year, drive more customers to promotional stores.
The supply of consumers squeezing their belts is limited, and many personal labels are becoming less and less concerned, which means they are gaining more and more customers. They even turn crises to their advantage.
On April 12 this year, Biedronka launched the “Anti-Inflation Biedronka Shield” campaign, which guarantees that the prices of more than 150 products purchased by customers are the lowest in the market. Children also have, for example, tofu, chocolate, ready-made soups or detergent concentrates. .
The campaign imposes a number of requirements on consumers who want to benefit from a non-refundable fee, which has raised doubts about the initiation of an explanatory procedure by the Office of Competition and Consumer Protection. – The main goal of the “Biedronka Shield against Inflation” campaign is to provide customers with the lowest possible prices and guarantee their consistency for the 150 most popular products on our list by the end of June. Thanks to this campaign, Biedronka is active. to fight inflation as a market leader, to determine the directions that our competitors should follow – says Arkadiusz Mierzwa, communications director of the Biedronka network.