PRICER.LT INVESTIGATION: WHY SALES OF BREAD DROPPING DOWN IN LITHUANIAN RETAIL CHAINS?

Pricer.lt

Pandemic and quarantines impacted behavior of consumers and if to listen to some retailers – customers are refusing to buy bread, baking at home and sales of bread are dropping down 15-19%:

https://www.tv3.lt/naujiena/lietuva/lietuviai-nebeperka-duonos-karantinui-isibegejus-ja-kepa-patys-n1067553

By being old retailers, we can say, that consumers are not changing so drastically and by observing customers in stores and especially in bread departments, we see that in some chains there are a lot of customers, but others are empty. It means that changes not in consumer, but in differences of retail chains.  Especially it is interesting, that some of retail chains are crying about falling sales of bread, but others are keeping silent.

Because Lithuania is promotional market (HiLow market), we decided to check what Lithuanian retail chains are offering to consumers during weekly promotions and from consumer position evaluate where is more and interesting bread and bakery products. We will check how much products are from industrial suppliers, how much from local bakeries (baked fresh, baked from frosted, defrosted – all types, because consumer don’t feel a big difference) and impulse products – small bakery products – croissants, buns, donuts and others which customers can buy additionally with basic breads.

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All promotions: https://pricer.lt/akcijos

Promotional leaflets: https://pricer.lt/leidiniai

Product promotions (try filtering options): https://pricer.lt/pricer-topai

Food promotions: https://pricer.lt/pricer-topai/maisto-prekes/all

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We will start from Maxima retail chain

10 offers:
6 industrial products,
4 local bakery products,
from them 3 impulse products.

IKI retail chain

12 offers:
6 industrial products,
6 local bakery products,
from them 4 impulse products.

Norfa retail chain

 

12 offers:
Visi 12 – industrial products.

Rimi retail chain

 

9 offers:
4 – industrial products,
5 – local bakery products,
from them 2 impulse products.

Lidl retail chain

 

11 offers:

3 - industrial products,

8 – local bakery products,

from them 8 impulse products.

What else is interesting.

The cheapest industrial local baguette is offered by Norfa - 0,31 Eur. Lidl with relaxation is offering analogical product for 0,35 Eur. Norfa promotional leaflet is valid for 2 week – Lidl product managers are becoming too lazy to look what is happening in other retail chains or just lost fear of competitors completely?

Cheapest dark bread is offered by Norfa – 0,89 Eur.

The best distribution has Vilniaus Duona wheat sliced bread Goja 500 g - in 3 of 5 retail chains - Maxima, IKI, Rimi. Goja is the cheapest in IKI and Rimi – 0,79 Eur (Maxima – 0,85Eur). Also Sostinės baguette 400 g is in 3 retail chains – IKI, Norfa and Rimi. Sostinės baguette is the cheapest in Norfa – 0,54Eur, Rimi ir IKI – 0,59Eur. Of course, nice job, Vilniaus Duona, for promotional distribution, but are you sure, that retail chains will like such promotional strategy, when they are competing with prices and assortment?

Conclusions

Retail chain / bread type

All offers

Industrial products

Local bakery products

From them 8 impulse products

Maxima

10

6

4

3

Iki

12

6

6

4

Norfa

12

12

0

0

Rimi

9

4

5

2

Lidl

11

3

8

8

As we see numbers of offers are similar in al retail chains. The smallest count of offers have Rimi – 9, is it normal for retail chain, which main sales are generated through hypermarkets where the strongest side is big assortment? Let they answer to themselves. The same question could be also for Maxima. The biggest count of offers have Norfa and IKI. Unfortunately for IKI all assortment is only in higher store formats which they have about 30 – it means that leader in count of offers and prices is Norfa.

Norfa is leading in industrial products offers. So, if You are adding also lowest promotional bread prices, customer who seeks best industrial bread offers will go to Norfa.

Another interesting thing – bakeries – the biggest count of in-store bakery products is in ... Lidl. Yes, in discounter! Small question for other chains, which have invested big money in bakeries, fighting for those few French bakery specialists - why do you need this, if You are not able to prepare offer for Your customers?

In the same way Lidl offers the biggest count of impulse products – this guarantees the bigger amount of bread and bakery items in their basket and of course bigger profitability.

So we think that we have answered to question why in some of Lithuanian retail chains consumer “changed” his behavior and some not commenting this question.

BE WORTH OF FREE CHOICE ALWAYS!

More information:

Head of food direction at Pricer.lt

Petras Čepkauskas

Tel.: 868512156

[email protected]

www.pricer.lt

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