Promotions in demand

Bargain hunting in the supermarket continues to increase

Consumer confidence is low, people are mainly price-conscious.

(Bild: Christian Jauschowetz)

Although Marcel Haraszti, head of the Rewe Group (Billa, Penny, Adeg etc.) is now expecting good Christmas business, customers are being very thrifty this year. "People are buying much more at entry-level prices. The proportion of promotions is increasing."

Specifically, an average of 38 percent of goods at Billa are already sold with discounts, at Billa Plus it is even 44 percent, according to the retail manager. "And the proportion of own brands is already 33 percent, compared to just 22 percent ten years ago. We already have 900 products in the entry-level price range under the clever brand." This trend also applies to other food retailers.

"We are actually inflation dampers"
After four years of crisis with coronavirus, inflation, an explosion in energy prices, etc., consumption is not picking up, and people only treat themselves to something good at festive times, says Haraszti. The rise in food prices is overestimated. In October, prices at Rewe supermarkets only rose by an average of 0.8 percentage points, "we are actually inflation dampers".

At the same time, the cost pressure on energy and wages is enormous. The company is paying around 90 million euros for electricity alone this year, compared to just 58 million in 2020. Last year's wage increase of 8.43 percent means additional cost pressure, which for the Billa Group with a good 47,000 employees (including 2,000 apprentices) alone means a further 100 million euros in additional costs. Efficiency is therefore being improved, for example by closing unprofitable locations.

New stores tend to be larger
At the same time, existing and new stores would tend to be larger. "We have increased the average area per store from 770 to 821 square meters." For cost reasons, home delivery after online purchases was also reduced to the Vienna area. In some other cities, such as Linz, Innsbruck and Salzburg, the delivery service foodora is taking over deliveries to customers.

Marcel Haraszti, head of the retail giant Rewe (Billa, Penny, etc.): "Longer opening hours against online retail."

(Bild: Tomschi Peter)

The Rewe Group would invest a total of 520 million euros this year, not only in stores but also in 1450 reverse vending machines due to the upcoming bottle deposit. Haraszti would also like to set up self-service boxes that are operated without staff in the 580 communities across Austria that already have no local suppliers.

Many mayors are also very interested in this, but in order to be economically viable, store opening hours would have to be extended by law. Currently, these locations are only allowed to open for 72 hours a week, criticizes Rewe boss Haraszti. In general, however, he would also like to see stores extended to 78 hours. "Otherwise, we shouldn't complain that sales are being lost to online retailers when it's more convenient for customers there," the top manager urges the future government to liberalize.