To eat or not to eat? Hungarian supermarkets affected by decreasing demand

In the spring, the Hungarian Central Statistics Office (KSH) recorded that the volume of sales in supermarkets decreased drastically. However, it is important to keep in mind that almost of all of these shops (Auchan, SPAR, Penny, Aldi, Lidl, Tesco) have a wide range of selection when it comes to non-food products as well. The question is, was it the purchase of food materials or other products that was more negatively affected?

This March the volume of retail sales dropped by 13 percent. When it comes to supermarkets, we witnessed a shrinking of 10 percent. However, this doesn’t necessarily mean that the purchase of groceries was decreased by this much. Large supermarket chains sell not only foodstuffs, but also other products, such as cleaning or household appliances for example. According to the answers from these stores, it does seem like consumers are buying less of these gadgets, Pénzcentrum reports.

Penny

The communications officer of the Penny supermarket, Eszter Kazatsay did confirm these beliefs. According to her, the sale of textile products, kitchen appliances and DIY gadgets fell. The focus of consumers switched to games instead, the demand for LEGO toys rose. Eszter also brings our attention to the fact that non-grocery items are at extra risk in an inflationary environment. This is because these are the first products that consumers will resign from purchasing. So, the increase in food prices leads to less sales in non-food items as well, as money must be spent elsewhere. This seems to be a trend in other supermarkets as well.

SPAR

SPAR reported that the sale of non-food products fell by 10 percent from 2021 to 2022. This was largely due to the high inflation and the weakening of the EUR/HUF exchange rate. Seasonal items are still selling relatively well, especially products for everyday use, such as batteries, photocopy papers, and cleaning liquids.

Auchan

Auchan also confirmed that there was a drop in demand for non-food items, despite inflation being smaller in this field. They further said that the price to value ratio is important for the shop. This is why they are awaiting customers with numerous products of their own brand, discounts and deals also when it comes to non-grocery commodities.

Lidl

Representatives of Lidl highlighted the fact that some non-food items still have the same prices as they had over a year ago, as indicated in their discount flyers. The Lidl Plus application also offers more coupons for these products from time to time. Compared to other shops, however, Lidl’s sale of these items is progressing as expected, there was no noticeable decrease.

Tesco

Tesco highlighted the increase in prices for manufacturing, distribution, and transportation of their products. They also confirmed that the demand for non-food items decreased. This led to a drop of 5 percent.

Source: Pénzcentrum