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WFor weeks, food retailing was about security of supply and supply. Now the fight for every customer starts again for supermarkets, discount stores and pharmacy chains in Germany. At least, the industry is stepping up its advertising activities these days to further stimulate business, as a recent WELT survey shows.
Because the time to buy hamsters finally seems to be over. In March there were still weekly sales increases of up to 40 percent during the respective comparative period of the previous year, in April the volumes are in some cases even lower than twelve months ago, according to current figures from market researcher IRI.
In calendar week 16, for example, sales of so-called fast-moving consumer goods (FMCG), such as food and hygiene items, fell by almost 21 percent. The Easter effect also plays a role here. Last year the vacation was a week later. Therefore, the week after Easter 2020 is compared to Easter week 2019.
According to experts, however, this technical effect alone is not enough for the least massive. Furthermore, the previous weeks show that demand has calmed down again. Probably also because consumers have seen that enough supplies always arrive in stores.
Special offers return on a broad front
Also, there should be plenty of supplies in many homes after the initial panic purchases. In any case, distributors report some double-digit frequency dips. And that creates new competition.
“The situation has normalized, so the differentiation phase is starting again,” says Klaus-Dieter Koch, founder and managing director of Brandtrust. The customer must be attracted again. That means: brochures and special offers are coming back on a broad front.
In the first weeks of the Corona crisis, several vendors reduced or even discontinued their discount campaigns, including Rewe and Penny, the hypermarket chains Real and Globus, and the pharmacy giant Rossmann.
After all, customers entered the stores and bought the empty shelves, and without paying special attention to the price. In addition, merchants were afraid of false promises, which could end up falling on them.
Because the amounts of sales of promotional products are enormously high, according to experts. If the advertised products are not on the shelves for days, the customer feels cheated.
Back to “normal marketing”
But now supplies appear to be safe. “The demand for longer-lasting food and hygiene items has somewhat normalized. This gives us the opportunity to replenish inventory in warehouses and markets, ”says the Rewe Group, for example.
Therefore, brochures and special offers are back to normal reach – immediately at Rewe supermarkets and at least promptly for Penny’s discount branches. And elsewhere, too, one is preparing for the new competition.
“We will return to normal marketing,” says a Real spokesperson on request. Because if you do it ad-free in the highly competitive food retail sector, it will break.
Globus obviously fears that too. The hypermarket chain has suspended its advertising for a few weeks. “At the beginning of the crisis, we focused entirely on our care mandate and therefore decided to forgo our brochure. Since calendar week 17, we have taken this up in a small edition, ”describes Jochen Baab, the management spokesperson.
“With promotions, we want to do something good for our clients in the crisis and thank them for their loyalty and patience these days. Furthermore, hygiene requirements can also be well implemented in advertised departments, so we see no cause for concern here. “
Source: WORLD infographic
Rossmann does the same. Lower Saxony had given up its usual brochures for a few weeks, but since April 20 there have been small brochures with eight instead of the usual 16 pages.
In May Rossmann will return to the usual brochures, as a spokeswoman announced to WELT. And that seems necessary. Because, according to IRI numbers, pharmacy chains in particular have been losing popularity for weeks.
Self reward phase
In the last 16 calendar week evaluated, for example, sales were 15 percent lower than the previous year, in calendar week 15 it was also 15 percent, and in the previous two weeks, there were seven, and sometimes 16 percent. IRI data analyst Sebastian Hendricks cites unavailability of popular items like toilet paper, disinfection, or disposable gloves as possible reasons.
Also, there is almost no frequency at many branches in city centers due to long-closed stores. But the need for cosmetic products has also recently declined due to contact restrictions, closed restaurants, pubs and nightclubs, and also long stays in the home office.
Source: WORLD infographic
So the usual price war in the fast-moving consumer goods business begins again. Many retailers even let the industry sales force return, albeit under stringent conditions.
And his interest in a place in the brochures is great. Because, according to Brandtrust expert Koch, brands will be in special demand in the coming weeks:
“Now we are entering a phase of self-reward. People have complied with political guidelines, have been quarantined, now wear a mask, want to indulge in something now. And self-reward is always done through brands. These are the famous lust purchases. Nameless products are just the last purchases. “
Real has already confirmed this trend. “Entry price products are currently much less in demand,” says a spokesperson, referring to an evaluation of receipts. Instead, for example, you buy expensive wine or fine Serrano ham instead of standard products.
Therefore, Koch advises brand providers in an advertising crackdown: “Brand manufacturers now have to invest heavily in advertising. This is the only way to get the attention of customers who are consciously seeking a reward for their own brand. Whoever announces now will be one of the big winners. “
