12/03/2013 00:00
TW
0
STAFF REPORTER LARGE hypermarkets, department stores and supermarkets in the Balearics are intensifying their advertising campaign to increase consumer spending . Companies such as Carrefour, Eroski and Mercadona which between them have captured the food distribution market in the region, are taking measures to recuperate their losses following in the wake of the financial crisis and its accompanying downturn in income. The main strategy followed by all the big food companies is to introduce discounts and withdraw items from their shelves which are not selling well.


Carrefour, for example has announced 25 percent discounts on an average of 10'000 products in all its centres, which in terms of family food shopping could mean a saving of hundreds of euros a month. Mercadona is also no longer stocking items in low demand and applying average discounts of 17 percent on its remaing products, which it claims will mean a saving to clients across all its centres of 2'000 million euros. The company hopes not just to encourage more consumer spending but also to save on operational costs.

Eroski is seizing on the occasion of its 40th anniversary of being a co-operative to launch campaigns announcing 40 percent discounts on some of its products, although it is fine-tuning the strategy to meet the needs of its suppliers. The company also said that it had registered a monthly rise of 7 percent in the sale of its own brands which now go to make up 26 percent of the company's total income in the Balearic Islands. The “own brand” success - mostly due to their being a cheaper alternative - is a blow to other manufacturers who are selling through the supermarket chains. Looking at food sales over the course of last year, the large companies have reported a downturn slightly above 3 percent.

In the case of non-food products such as textiles and household goods, the fall was much greater with an average fall-off of around 11 percent.
Food distribution companies said that under the pressure of the current economic crisis, simply being able to retain the same level of sales has to be considered a success. The Food Industry claims that people have to eat even in times of recession but acknowledges that many clients are now minimising their spending and changing eating habits accordingly.