Packaged Food Market in Greece

Although last year manufacturers were more optimistic, hoping that given the importance of food in Greek culture consumers would not reduce spending on food even in the context of recession, this was not the case. As Greeks were left with less money to spend, shopping lists became common in each household, with consumers avoiding any non-essential purchases. Although in many food categories volume sales remained stable, value sales decline steeply nearly across all segments, as extensive discounting and migration to private label products affected overall value.

Artisanal products continue to lead
Artisanal products continue to account for the bulk of sales of packaged food in Greece. Bread and pastries as well as cheese are the categories where artisanal products account for a considerably high share, although their presence is significant also in other categories, namely honey, yoghurt or olive oil. In line with their often lower price, artisanal products are not expected to suffer considerably from the economic downturn.

Discounters see best performance in 2011
In line with squeezing disposable incomes and consumers leaving aside their reluctance to buy unbranded products, discounters saw a rise in share. This was regardless of Aldi withdrawing from the Greek market and Dia’s gradual closure (the company was acquired by Carrefour-Marinopoulos SA, and by the end of 2011 all Dia outlets changed to Marinopoulos). Lidl performed extremely well in 2010 and 2011 given its widespread presence across the country, including non-urban areas, and also its competitive pricing. Supermarkets gained share at the expense of small grocery retailers. Kiosks on the other hand, in line with high prices and numerous outlet closures or a shift from being open on a 24-hour basis to less (ie 06:00hrs to midnight) lost ground.

Forecast remains pessimistic
With the economic situation in Greece remaining bleak, there are no signs of recovery for the near future. Mass increases in unemployment and even stricter measures are expected from the government to manage the country’s debt. Consumer behaviour over the forecast period is thus expected to change significantly, with consumers being more price-sensitive, switching to private label products, chasing offers and promotions, purchasing unpackaged products and doing some of their shopping in outdoor markets, where prices are lower. Reducing purchases of non-essential or luxury items will represent another trend, while a considerable decline in spending in foodservice establishments is expected. Uncertainty and pessimism characterise the expectations of manufacturers and consumers alike. Tax hikes for food products are expected to be imposed over the forecast period.