Retail trade is one of the most important sectors of the global economy, showing continuous growth and evolution. Despite the challenges it has faced in recent years due to the pandemic, disruptions in the supply chain, the energy crisis, and the inflation, it has demonstrated resilience both globally and domestically. The organised grocery Retail is one of the largest sub-sectors of the Retail sector, which presents significant opportunities for development in Greece and abroad.
KPMG's survey on the future of Retail explores the structure, size, growth, and financial performance of the organised grocery Retail in Greece, while subsequently providing a high-level description of the key players in the market and their characteristics. Finally, it focuses on the future direction of the global grocery market, highlighting the dominant trends, the technologies that will drive the sector, as well as the landscape that has been shaped in the Greek market.
The key points of the survey are the following:
- Despite the turmoil in the global economy, in the last 5 years, the organised grocery Retail in Greece recorded a turnover with an average annual growth rate of 7.1%, a percentage equal to that of the overall Retail trade.
- During the same period, the gross profit margin of the organised grocery Retail in Greece shows growth with an average annual rate of 3%.
- The Net debt over EBITDA ratio shows a decrease, reaching 3.9 for 2021, indicating that grocers have managed to improve their profitability in the recent years.
- The number of organised grocery Retail stores in Greece has reached 2,700, which belong to 53 retail chains.
- The six largest players in Greece had a cumulative turnover of approximately EUR 8.46 billion for 2021, an increase of 61% compared to their corresponding turnover for 2017.
The dominant global trends for organised grocery Retail businesses are the following:
- The entrance of virtual and augmented reality, such as the metaverse, which constitutes a virtual universe.
- The adoption of artificial intelligence solutions by a large part of businesses.
- Autonomous delivery of products as an alternative delivery method with reduced cost.
- Partnerships and ecosystems between businesses offering innovative products and experiences.
In Greece, the critical issues that concern the organised grocery Retail businesses are the following:
- Uncertainty about the economy due to increasing inflationary trends.
- The demand for designing competitive strategies for the supply chain.
- The increased energy costs.
- The liquid expectations of Greek consumers.
The prevailing trends in the Greek market are the following:
- The expansion of the physical presence of major players through the acquisition of local chains with convenience stores.
- The return of consumers to private label products.
- The interest of consumers and investment of grocers in ESG initiatives.
- The preferences of consumers for extremely fast delivery of a specific range of products through Quick commerce.
The organised grocery Retail market is experiencing significant growth, despite the obstacles and challenges that are evolving globally. The adoption of modern technologies both in the activities related to the operation of businesses in the supply chain, back-office processes, and also in the activities related to the direct contact with consumers during the purchasing process, will offer significant benefits to both sides and will contribute to the further development of the sector.
Senior Manager, Consulting
KPMG in Greece