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Research: Italian discounters benefits from inflation

If 2020 has rewarded all supermarket retailers with that +8.9% (inflation at +0.7%) due to the pandemic from Covid and the impossibility of choosing its stores, 2022 will see one growth of the market value of +5.8% for the increase in prices (inflation in large -scale distribution at 5.7%). A situation that has never occurred in the last twenty years.

Inflation increases and above all it enjoys the discount

In 2022 the promotions are clearly decreasing while the discount random went from a market share of 17.5% in 2019 to 20.6% at the end of 2022, an increase of more than 3 points in four years. In 2022 it seems to have downloaded the increase in prices on the consumer, a fact due to the image of convenience that has always distinguished it, contrary to the large-scale distribution in this way increases the margin while Esselunga and the supermarket other retailers must leave part of the margin on the field for calm down prices and increase in suppliers' lists. The 2022 gap between volume sales (+0.1%) and value sales (5.8%) releases a scissor of 5.7 points. The increase in the 2022 closing prices equal to 5.8%, inflate inflation. The only channel where volumes continue to grow is that of the discount (+2.9%).

The e-commerce after the glories of Covid marks the pace.

According to IRI, consumers resisted by financing the increases in supermarkets and discount stores until the end of August 2022, but on the return from holidays they entered the trading down, that is, they bought less in volume.

If we observe the inflation produced for the increase in prices, we realize that the discount stores distance all the other supermarket channels with a +14.1% since the beginning of the year. Even the home specialists who started with a negative figure at the beginning of 2022 give their contribution to inflation with +4.8%. As we said at the beginning, these data comfort the thesis that the discount has increased the prices in full, without trying to mitigate the increase in suppliers' lists and, indeed, increasing their margins, which however we will read in the first months of 2023, seen who do not make budget half-yearly.

As we pointed out, e-commerce marks the step after scoring +132% in 2020 thanks to the pandemic. The same happens for home deliveries that had recorded in 2020 +120% and for the retreat to sales point, +281% in 2020. Today e-commerce is at +4.1%, home delivery to 4.7% and the pdv withdrawal at +0.5%.

The categories most involved by the increase in prices.

Above all, it affects PET Care, a sector exploited by many elderly people who have a reason for life, the increase, if compared to other product sectors, appears sometimes unjustified, given the different use of raw materials and worked.

The promotional lever is reduced to all sales channels, except in the Hon Line. The reduction of promotions pushes the inflation of the average price, which remains higher than the basic prices.

The cutting of the promotions mainly concerns the premium products in favor of the mainstream ones and the highest discount brands, up to 50% cut.

It significantly increases the weight of the first prices in large-scale distribution channels.

Curiously the brand of the distributor, MDD, grows in all the channels of the large-scale distribution, while it does not grow in the same proportions in the discount store (today its share is 59.6%) for greater entrances of national and international brands in the assortments. IRI also reports about IDM, brand industry, which this year increased the launches of new products in the large-scale distribution.

In conclusion:

  • promotions decrease,

  • increases the number of sales channels by the consumer,

  • increases the search for convenience in channels and in the cart.

Discounters once again proves to have dynamics and objectives very different from the supermarkets and show their success.

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