As a response to rising prices, every second Austrian is increasingly turning to inexpensive own brands, according to a current survey. Discounters are also benefiting from inflation. The organic boom has subsided for the time being.
Wien. The so-called champagne index does not indicate how much a glass of sparkling wine costs at the Opera Ball. It measures the small pleasures people can and want to afford. The latest study from February shows that the willingness to buy non-essential products is declining significantly. For four out of five Austrians, the biggest concerns are inflation and rising living costs. Savings are already made with daily shopping. This is shown by a survey by the market research institute Marketagent presented on Friday, according to which price sensitivity in supermarkets has recently increased significantly.
“The current wave of inflation is leaving its mark on the entire population. 95 percent perceive a strong or rather strong increase in prices,” says market agent boss Thomas Schwabl. Before the pandemic, one in five people rated the price level as “very high”, but now twice as many.
Half of those surveyed consider the price increases to be unjustified. One in three sees the responsibility for this with the producers, 15 percent believe that the retail chains enrich themselves unjustly.
They deny that in unison. Manufacturers’ price increases last year were only partially passed on, which is why retail chains’ profit margins continued to decline in the previous year. Overall, the food trade recorded an inflation-adjusted drop in sales of 3.2 percent in the previous year.
Especially the top dogs Spar and Billa, who recently had to cede market shares to cheaper discounters, are annoyed at the “big multinational branded companies who are now publishing their balance sheets and are happy regarding rising profits”. Just last week, the two world’s leading retail producers, the Swiss Nestlé group and the British Unilever, announced that they intend to raise their prices further.
71 percent of the sales representatives surveyed by Marketagent assume that prices will continue to rise in the coming months. A quarter expect them to level off at current levels. “Industry is producing more expensively than ever before, retailers are reducing their margins and consumers think carefully regarding every issue. This study shows all of that very clearly,” says retail expert Roland Pirker.
Lots of traffic for discounters
The current survey also reveals another explosive finding: one in three is increasingly buying from discounters. “Especially for products in the entry-level price segment, we are currently registering very good customer demand,” reports discounter Hofer, where a lively influx of customers was recently registered. 90 percent of the entire range at the country’s largest discounter consists of inexpensive own brands.
Such are generally experiencing increased demand. According to the Marketagent study, 48 percent of Austrians deliberately bought more private labels than before.
The large supermarket chains have long since reacted to this. Billa expanded its Clever range from 650 to currently 700 items last year. Demand for private labels has increased by double digits over the same period. The private label share is even higher at competitor Spar. The in-house cheap brand S-Budget recorded a sales increase of 20 percent in 2022.
Conversely, the high inflation is causing a slight decline in the higher-priced organic range. With a drop of 3.5 percent in the quantity sold, the organic boom of the past few years ebbed for the first time.
(fre, “Die Presse”, print edition, February 18, 2023)
