The price of shopping

The communications war between Hungary’s two FMCG giants, Tesco and Spar keeps raging. A few weeks ago, Spar filed a complaint against Tesco at the Hungarian Trade Association’s Ethics Committee and the committee condemned Tesco. We can be sure that the battle continues. However, if we look behind the scenes we find the real reason of the feud: increasingly fierce competition. Retail sales keep plunging and the economic crisis forced retailers to change their business plans. The recession is here to stay and consumers have learnt a lot in the past few months. They understood that short term needs should never be financed by taking out medium or long term loans. From now on, the average consumer will not be as brand conscious as before, he will select products more carefully and look for low prices. Retail chains will communicate more precisely targeted and controlled information. Chains’ leaflets and the role of billboards along access roads linking towns with motorways are going to be more significant. Billboards’ life cycle are expected to shorten, because chains have to react fast to the promotion campaigns of competitors. It is not quantity, but shopping budget that sets the limit of purchasing. A young couple hardly spends more than HUF 5,000 on weekend shopping and old people who live alone live off less than HUF 1,000 per day. Competition means more promotions, at least until new factors in decision making are examined: for instance, what qualifies as Hungarian product on the domestic market?