Magazine: Retailer ranking in the light of the emergency situation

György Vámos
general secretary
National Trade Association

About last year he told that Hungarian families spent more than HUF 12,000 billion in stores in 2019, at 127,000 points of sale. The market expanded by 6 percent and FMCG’s share from Hungarian retail was more than 50 percent. However, sales growth in the sector was below the average at 3-4 percent. The main reason of this is that family spending in grocery stores and drugstores is always more planned than in other types of shops. In these two domains, there are more than 40,000 active shops.

Mr Vámos told: Many assumed that that the panic-buying after the breakout of the coronavirus pandemic would generate a sales boom in the FMCG category. This isn’t the case; on the contrary, 2020 is going to be a crisis year. These stockpiling periods – there were four of them – only lasted for 1-2 days, and although sales were many times bigger than normal, following these sales slipped back to the usual level or in certain cases they went below that. To make things worse, in the last month the FMCG market was practically at a standstill, families switched to more conscious spending as they are uncertain about the future. It also impacted their spending habits that many people were afraid of losing their jobs or some of them have lost it already.

The general secretary reckons that it also puts the FCMG market in a difficult situation that retailers have to pay the extra costs of protection measures and equipment. There was an extra organisational task too, due to the new rule that only those consumers who are older than 65 years can visit the shops from 9:00 to 12:00. Plus it has turned out that two hours would have been enough for this special period, as turnout tended to be very low in the third hour.

There is great pressure on grocery retailers to buy more Hungarian food products from manufacturers. However, the last few years already proved that retailers give priority to Hungarian suppliers at all times. In spite of the COVID-19 induced stockpiling periods, FMCG sales haven’t grown yet in 2020. Even in the busiest period during the pandemic, there were always enough products on the shelves. Mr Vámos’ conclusion was that the effects of the coronavirus pandemic will be felt in the FMCG market for a long time – one of these is the growth in online sales. //