2023-06-28 12:35:45
Looking at the sales data, one might think that the modern distribution bursts of health, but the reality that emerges from a more in-depth analysis is decidedly less rosy. The leap in turnover – plus 8% since the beginning of the year – is driven exclusively byprice increase, while volumes are constantly decreasing (down 3.7% in the first five months of the year). And, according to forecasts by NielsenIQthings are not destined to change in the short term: for the packaged mass consumption (Lcc) the whole of 2023 should close with an increase in turnover of 7.5% with a contraction in volumes of around 2.5%. This means only one thing, that Italian consumers are tightening their belts and that, when inflation subsides, even value sales could slip into negative territory. In order to restore strength to the purchasing power of households, there should in fact be a salary increase or a deflationary processbut neither event is on the horizon for now.
The first signs of a slowdown in prices on supermarket shelves are already there, as is happening in the economy as a whole, but in large-scale distribution the cooling is slower and starts from higher levels. The peak of inflation was in fact reached last February (up 16%), while in the latest survey, that of May, the progress was still 14.1%. The most significant drops are recorded in fresh food (from +16.4% in April to +14.1% in May), fish (from +7.8% to +4.8%) and home care ( from plus 16.3% to plus 14.7%). However, it should also be said that an important sector such as that of fruit and vegetables has recently recorded a marked increase (from +9.4% to +11.5%).
Another rather eloquent figure regarding the suffering of families is that relating to the channel Cash&carry, which represents a good indicator of consumption outside the home, i.e. bars and restaurants: well, sales are registering a rapid slowdown, confirming the fact that, to make ends meet, outgoings are also being reduced. If the January data showed a leap of 31.6% compared to the same period of 2022, those of February (up 18%), March (up 11.4%), April (up 8.8%) progressively decreased to at most 0.2% in May. A substantially unchanged trend, which heralds a negative reading in June.
Other data collected by NielsenIQ also highlights how i purchasing behavior point to savings. There is, for example, that relating to the frequency of purchase and the filling of the cart. From January to March, the frequency of purchases grew by 4%, while the number of finished products in the cart decreased by 9.2%. This means that you go to the supermarket more often but buy less: a strategy to buy only the essentials and minimize waste.
Lately they are also facing quite a few difficulties discount which, in the period in which the first inflationary pressures had begun to emerge, had been chosen by the Italians to contain food spending. Now not even the discounters are able to carry out this task and are thus giving back part of the progress accumulated in the past. Instead, I’m on the mend hypermarkets which, conversely, until recently were the most penalized points of sale. In fact, they are the channel that in the last twelve months has managed to contain the decline in volumes the most (minus 0.5% for surfaces from 2500 to 4499 square meters and minus 1.6% for those above 4500 square metres). By contrast i supermarkets they have to deal with a drop in volumes of 3.2%, free service of 4.2% and discount stores of 6.2%.
Graphic by Silvano Di Meo
At the level of product categories, the NielsenIQ data reveal how consumers are oriented towards packaged food, which in terms of volume loses “only” 1.6%, while beverages (down 5.2%), home care ( minus 5.8%), personal care (minus 5.7%) and cold are at the bottom of this ranking. In between are grocery (minus 3.7%) and fresh (minus 3.5%). In this context it is not surprising the private label (MDD) success, which represents the best compromise between price and quality. Overall, its volumes are even up by 3.5%, while value sales are up 16.2%. The best performance is that of the so-called “first price” (plus 9.8% in volumes), a trend that clearly highlights the search for savings. However, the 7.3% increase in volume of the wellness lines should also be underlined, which shows how Italians, despite economic hardships, still try not to give up on meeting their needs.
In an overall negative context for volumes, however, there are positive notes. About a third of the product categories are growing. Chicken (up 6.6%) and turkey (up 44.9%), for example, fall into this group for the simple reason that they are a valid alternative to beef. Then there are the “consoling” consumption such as perfumes (both men, plus 26.8%, and women, plus 24.4%), candies (plus 6.6%) and pizzas (plus 36.1%) . Finally, the Italians do not intend to give up on healthy products: the volumes of sports nutrition are growing (up 21.5%), fermented milk (up 11.4%), nuts without shells (up 6.9 %) and Greek yogurt (plus 5.2%).
Graphic by Silvano Di Meo
Difficult on the network in the first quarter: turnover slowing down
The first three months of this year have been quite difficult for them online sales of large-scale distribution. Despite the increase in sales prices, the turnover of this channel has always lost ground. A timid recovery materialized in April, but the situation remains complex. According to the surveys carried out by Circa for the OsservaItalia section of the Repubblica website, the increase in sales concerned only the food sector (up 5.9%), while the drug sector continued to lose ground (down 0.9%). Over the twelve months (May 2022-April 2023) the balance is better: the online turnover of modern distribution grew by 5.8% to 2 billion euros.
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