There are special offers at Easter
About 36% coffee, 40% cola and almost 50% ice cream: the big retail chains are trying to make up for the recent wave of price increases with numerous price campaigns on branded items before Easter.
Food prices are currently rising faster than they have for a long time. Many consumers therefore have to restrict themselves. But ahead of Easter, major grocery stores are trying to entice customers to shop with a flood of special offers. “Discounts are supposed to save Easter”, headlined the specialist newspaper “Lebensmittel Zeitung”.
Around 36% off coffee, 40% on cola and almost 50% off ice cream: If you leaf through the current brochures of Aldi, Lidl, Edeka, Rewe and Co., you will find plenty of special offers. Aldi Nord sends the “price heroes” into the battle for customer favor. Sister company Aldi Süd promises “eye-catching prices” and competitor Lidl “best prices for Easter”. “It seems that retailers want to show what they can do before Easter to attract customers to stores,” food expert Marco Sinn of market research firm IRI told the “Lebensmittel Zeitung”. “This may distract some customers from the recent sharp price hike.”
Sales have exploded
In fact, the food trade is currently under more pressure than it has been in a long time. During the corona pandemic, the food trade was one of the winners of the crisis. Edeka, Rewe and Co. took advantage of the fact that people couldn’t go out for a long time and could barely travel. Instead, consumers indulged at home and were content to dip a little more into their pockets to spoil themselves when shopping. Grocery sales literally exploded.
But that’s yesterday’s news. In the first two months of this year, sales in the food trade were already four percent below the previous year’s level, according to figures from market researcher GfK. And there were also other signs that there could be an “epochal shift” in the buying of everyday goods, said GfK expert Robert Kecskes. In a GfK survey of 1,000 consumers in January, 77% of people were concerned about rising food and drink prices. And nearly half of them said price increases would affect their buying behavior. Keckes is confident that shares would now be even higher given the war in Ukraine.
In fact, there are now signs that the buying behavior of people in Germany could fundamentally change. For the first time since the pandemic began, people used cheaper products more frequently in February, Kecskes reported. The market share of retail brands has increased significantly – at the expense of branded products. Also, for the first time in a long time, discounters took a small market share from supermarkets in February.
Barrage of special offers against inflation
Given these challenges, it’s a promising strategy for retail chains to focus on price campaigns for branded goods, especially ahead of Easter, Kecskes said. After Christmas, Easter is the second central holiday during which people particularly like to buy branded goods. “People are hesitant to switch to house brands. Retailers just have to offer a number of special offers,” Kecskes said.
The current flood of special offers can help consumers weather the flood of price increases, at least in the short term. But in the end, according to Kecskes, they still face a major challenge: “People are willing to pay a little more for their favorite products. But that has to be compensated elsewhere. It has become much more difficult.”