Supermarket sector set for restructuring

The 9.7% annual increase in supermarket turnover in 2020 – amounting to additional revenues of more than 1 billion euros – is set to drive changes in the retail landscape in Greece.

The rise in turnover – even though profit growth won’t be as impressive due to the increase in operating expenses last year – is expected to lead to internal market restructuring in the medium term. This is because some players are emerging stronger from the first year of the pandemic and are set to strengthen their position further by implementing acquisitions in the medium term.

It is no coincidence the sector, which, compared to the rest of Europe, has a low degree of concentration, now finds itself on the radar of investment funds such as CVC Capital Partners.

At the same time the evolution of supermarkets into department stores will also attract more shoppers, while at the same time constituting a threat to other retail sectors. When the temporary ban on the sale of non-essential products is lifted – having been introduced after stores selling similar products were forced to shut as part of lockdown measures – a section of consumers is expected to continue buying these items at supermarkets instead of other stores. According to a Nielsen survey for 2020, commodities other than groceries observed a 10.7% annual increase in sales at supermarkets.

Besides the course of the pandemic, investments being planned by chains are set to play a key role in the growth of the sector in 2021. Market leader Sklavenitis, which launched online services too in 2020, is set to place emphasis on improving its e-stores and expanding its reach to more areas of the country this year. Its structure and operation are expected to be completed within the first quarter of 2021.

Rival AB Vassilopoulos is preparing investments of around €50 million, the same as in 2020, including new stores, the installation of electric car charging facilities and new in-store services.

METRO, which controls Mymarket and Metro Cash & Carry, is planning to spend €35 million on investments in expanding its distributions centers at Thessaloniki and Oinofyta, new stores, and its e-shop for wholesale customers.

Masoutis is also making plans for investments of €20 million in new stores in Athens and Patra as well as a radical facelift of existing stores.