The challenges of the large retail sector

The year 2023 was dominated by various factors that had an effect on the real economy and consumption, linked to pre-existing, medium- and long-term phenomena and to new events that have redesigned balances and priorities. 

The large retail sector, in particular, has continued with its commitment towards combating inflation, by offsetting price increases as much as possible, so as to defend purchasing power. A challenge that has become increasingly difficult to sustain, given the already reduced margins since 2022. Factors linked to international scenarios have also made their presence felt: primarily the relentless high cost of energy and the continuation of the Ukrainian crisis in particular, which in turn continues to have an impact on European agri-food prices. On a purely Italian level, labour costs also weigh heavily: on this front Conad has also played its part in the discussions for the renewal of the relevant Labour Agreement.

As 2023 was coming to an end, the Middle-East came dramatically onto the scene with the attack on Israel on 7 October and the consequent, extremely harsh offensive by Tel Aviv on the Gaza Strip, which led to a series of severe impacts on international logistics. In this regard, one should consider that according to an ISPI estimate, the cost of transporting a container from Shanghai to Genoa almost doubled between the beginning and the end of December.

In Italy, the entire large retail sector, fully integrated into an Omnichannel system, recorded an increase in turnover, reaching 9.9 billion euros in December 2023, up by 4.3% compared to the previous year (Source: “The state of Consumer Goods in Italy” – NielsenIQ).

Stores specialising in pharmaceutical products saw growth of 10.8%, discount stores of 6.5%, supermarkets of 5.5%, superstores of 2.2%, while hypermarkets over 4,500 m² remained stable. Packaged Consumer Goods closed 2023 with an increase in value of 8.3% compared to 2022. 

As regards promotional sales, they maintained a positive trend with a promotional share of 23.4% in December 2023, slightly lower than December 2022. This increase was down to the efforts of the distribution channels, which offered significant discounts.

Finally, if we take a look at own brand products, these represented 21% of Packaged Consumer Goods in December in supermarkets, hypermarkets and self-service shops, while for the entire Italian Omnichannel sector, including discounts, the share rose to 29.6%, confirming its increasing importance for Italian consumers. Meanwhile, leading brands saw a decrease in their market share of 1%, moving from 12.3% in 2022 to 11.3%.