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Greece Food and Drink Report Q2 2010
Market |
Food and Drink |
Report Type |
Market Research |
Country |
Greece |
Published |
9 February 2010 |
Number of Pages |
68 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
File Format |
- |
Despite Greece falling into recession in 2009, we expect the country to be one of the quickest to recover as the global economic situation picks up. Unlike some of its peers in Western Europe, Greece is not reeling from the bursting of a house price bubble; we expect the expansion of domestic demand to continue to outstrip the eurozone average over the next five years, as the economy modernises and the GDP per capita catches up with other Western European states.
This view looks to be shared by Belgiumbased grocery retailer Delhaize which in October 2009 announced that it is to acquire Greek retailer Koryfi through its local unit Alfa-Beta. The move continues Delhaize’s record of investment in Greece, which over the last five years has proven to be one of the firm’s most dynamic markets.
Between 2003 and 2008 Alfa Beta’s revenues climbed by 57% driven by new store openings and increased sales at existing stores. This partly thanks to Greece’s rapid economic expansion, with GDP growth averaging 4.1% over the period. In 2009 Delhaize purchased the 35% stake in Alfa-Beta that it did not already own and the acquisition of Koryfi suggests that it will continue to invest heavily in the Greek market. The deal is worth EUR8.8mn and gives Delhaize control over 11 stores and a distribution centre.
Delhaize has indicated that the acquisition will strengthen its activities in Thrace, an area of northeastern Greece where it currently has almost no presence. The firm has a stated strategy of reinforcing its presence in existing or adjacent markets through fill-in acquisitions; with a large proportion of the mass grocery retail (MGR) sector accounted for by small chains operating under 25 stores, this strategy should be relatively straightforward to implement and facilitate rapid expansion.
Alfa-Beta is currently the country’s second largest retailer, generating just under half the revenues of market leader Carrefour. However, with Carrefour’s attentions currently focused elsewhere (with the revitalisation of its French network a particular priority) there may never be a better time for Delhaize to close the gap. Both firms are likely to benefit from the changes in Greek consumer behaviour. In the past, growth in the MGR market has been curbed by a preference for fresh produce, prepared at home and sourced locally. However, the development of Greece’s economy has led to changes in food consumption, with longer working hours and more women in the workplace meaning that Greek consumers are increasingly opting for added-value convenience items.
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