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Retail trade under strain

05/09/2011 07:16
The retail trade businesses are under severe strain since they are called to face the increased competition in an environment of subdued demand.

The new players in the sector of supermarkets have pushed the market shares of the existing players down and have forced them to change their strategy.

The presence of Lidl causes a headache to the rest, who are called to deal with the undeclared war of prices of the German chain.

The partial change in the consumers’ behaviour, who make selective purchases from various super markets instead of one, has aroused strong feelings.

The consumers also seem to lose their loyalty to the brands and to the lower prices of the private labels or other conventional types.

The super markets are highly concerned about the trends and whether they are permanent and have introduced the “new consumer”, who has no loyalty in specific super markets or brands.

The price battle concerns almost all super markets, which make offers and lower their margins of profits to deal with the new conditions.

The undeclared price war has been intensified after the Mari explosion.

The explosion has shrunk the stagnated consumer war, generating losses to the turnover of the super markets.

The market basket has shrunk and most retail public companies expect a deterioration of the tough conditions in the second half.

The Greek crisis seems to extend the climate of uncertainty, encouraging the freezing of demand.

In his statements to StockWatch, Executive Chairman of Orphanides, Christos Orphanides said that the traffic in the retail trade is low for three reasons mostly, the financial crisis, the Greek debt crisis and the explosion at Mari, which affected negatively the consumers’ psychology.

According to Mr. Orphanides, people are now limiting purchases to the essentials and they no longer buy electrical appliances etc.

Orphanides super markets announced lower profits in the first half of 2011 despite the impressive increase of 7.3% in the turnover, which has to do with the opening of five new super markets.

Speaking to StockWatch, POVEK General Secretary, Stephanos Koursaris said that after the Mari explosion, we have entered a period of recession with low mood for purchases and investments.

“The psychology is very negative. Apart from the explosion and the economic impacts, the extended indecisiveness in the promotion and approval of measures for the economy contributed heavily towards this direction”, he said.

“We expect the promotion of the economic measures so as to give a boost to the market and economic activity begins”, he concluded.