Shopping in Greece- Bearing no gifts

The depression is changing the shape of Greek retailing

Closed for ever?

NO ONE can accuse the Greeks of over-commercialising Christmas. Central Athens at the end of November had little of the seasonal sparkle you find in other European capitals. The economic crisis has broken the spirit of Greece’s normally enthusiastic shoppers. Private consumption has dropped by a fifth since 2008. The misery is compounded by incessant protests, which snarl traffic and halt public transport in the city centre. “Shops don’t expect anything from Christmas,” says a flower vendor in the posh Kolonaki district. “For Rent” is the fastest-growing retail chain, goes the bitter joke.
The gloom is not evenly spread. Shopping malls, relatively new to Greece, do better than high streets. Sales of men’s clothes have collapsed; those of women’s have done a bit better and children’s best of all. The crisis has pummelled international brands but lifted local ones that trade on their Greekness. Carrefour, a French supermarket behemoth, sold its stake in its Greek operation in June. Alfa Beta, though, is a star in the 11-country network of its Belgian owner, Delhaize.

Changes to what Greeks buy and where they buy it are likely to be lasting. Greece’s retail sector is among Europe’s most splintered. Supermarkets account for just 48% of grocery sales, the lowest share in Europe, says Georgios Doukidis of IELKA, a retail think-tank.
Everyone expected a cull but it was slow in coming, partly because marginal shops held on by dodging tax. Now they face a triple catastrophe of slumping demand, price cutting by big chains and a drying up of liquidity. “Just now you will see a big acceleration” of the long-awaited shakeout, predicts Camille Egloff of the Boston Consulting Group. SELPE, the retailers’ association, says small shops’ non-food sales have plummeted more than 30% by volume. Bigger emporia have suffered less; some have even boosted sales.
Few have been as deft as Alfa Beta, whose 266 stores have increased their share of the grocery market in the past five years from 17% to more than 21%. Delhaize leaves Alfa Beta considerable autonomy, the “opposite” of Carrefour’s top-down approach, says Ms Egloff.
Alfa Beta started out introducing richer Greeks to international brands, but cut prices in the 1990s to widen its appeal. In the crisis its message to shoppers has been: you are not alone. When the Greek government rolled back pensions and public-sector pay, the chain cut prices and mailed out coupons to the afflicted groups.
Alfa Beta is also tempting Greeks away from the global brands that it pioneered. Its range of “private label” products (the supermarket’s own brands) is elaborate by Greek standards, embracing jumbo-sized kitchen rolls and the “Close to Greek Nature” line, which appeals to a yen for food that is relatively cheap, of high quality and identifiably Greek. Alfa Beta’s private-label sales have nearly doubled to 22% of the total in the past few years.
This is a big change. Global brands have a greater hold over Greek consumers than over most other Europeans. Coca-Cola dominates fizzy drinks; Heineken reigns over beer. But the crisis gives an opening for supermarkets’ taste-alikes and local brands that have made being Greek a selling point. Fix Hellas is starting to cause headaches for Heineken. Loux and Epsa are patriotic challengers to Coca-Cola’s orangey Fanta.
International brands are battling back in two ways. The first is to make their wares more affordable, both by cutting prices and by shrinking packets. The other way is to make common cause with the beleaguered Greeks. This is not easy for multinationals. Coke is cheery globally, but to chime with the Greek mood it drew on its experiences in Argentina during the calamitous early 2000s when it found ways to buck up customers.
All the better if brands can seem more Greek than local rivals. Fanta contains Greek oranges. Heineken boasts of having “90% Greek content” and has concocted a five-grain beer, called Bios 5, for Greece. This makes grocery shelves a little more Greek. But the crisis is reshaping Greece’s retailing to be more like its neighbours’.
http://www.economist.com/news/business/21567984-depression-changing-shape-greek-retailing-bearing-no-gifts