In large-scale distribution, the drop in volumes is worrying

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An inflation that gives the creeps. The drop in volumes purchased by families is increasingly worrying large-scale distribution brands and producers of consumer goods.

«The decline in sales began in September 2022 and reached up to -5%, a contraction that affects the entire food and non-food offer – comments Romolo De Camillis, retail sales director of NielsenIQ -. All sales channels are in difficulty with the discounters in greater difficulty. Now the average receipt is also lower, which sees a -1%, confirming how purchases are moving towards cheaper products». With these countermeasures implemented, consumers manage to recover almost 6 percentage points of inflation due to the drop in volumes and spending. According to NielsenIQ data, the biggest drops in sales have affected the fish department, which loses over 18%, but also frozen foods (-9.5%) and fruit and vegetables (-7%). This is the updated photograph of the shopping cart according to the surveys of the company that has always studied consumer behavior.

Among the latest evidence is the growth of private label products with volumes in the positive area despite double-digit price increases. Large-scale distribution is losing margins but in the first few months of the year, according to NielsenIQ data, there was also a slight increase in promotional pressure which helped to cool down inflation. «In the main countries of the EU we have seen how the strategy for saving envisages more purchases per week by buying the essentials – continues De Camillis -. It is a behavior that also involves those who have a good income but are now more attentive to how they spend while previously supporting consumption”.

As for the near future, Vittorio Cino, general manager of Centromarca, the association of leading producers of large-scale consumer goods, believes that “in the second half of the year there could be a deceleration in consumer inflation, even if no deflation is foreseen, for which prices will not return to pre-pandemic levels”.

This situation worries the brands of large-scale distribution. «With the weakness of consumption we see a risk for the Italian agri-food system and we are deeply concerned about the prospects for companies in the distribution sector which, with profitability under pressure, could find themselves in the position of not being able to maintain the commitments and investments necessary for development » adds Carlo Alberto Buttarelli, president of Federdistribuzione on behalf of the large-scale retail companies.