Greece: marked by crisis

Crisis

The economic and political crisis in Greece has left its marks. As expected, pet sector sales for 2016 declined both in volume and value. Initially, consumers reduced their purchases or began to buy more economical products, but throughout 2016 ever-stricter fiscal measures affected all market sectors. Furthermore, the enforcement of capital controls had an even greater impact on companies’ daily business, as all foreign credit was lost. Many mid-sized companies that were supported by foreign financing closed down, while increased bureaucracy affected even the strongest companies.

Consumer behaviour

Capital controls have also massively affected consumer behaviour. The lack of cash (daily maximum cash withdrawals from ATMs or banks was €40 ($43)) was felt at all levels and uncertainty for the future made consumers reluctant to purchase. There were no impulse purchases: most buys were the result of consciously thinking of their basic needs. Due to the lack of cash, online purchases took off, as they provide immediate price comparison options and credit card payments – a service that was not available at all retail stores.

In 2015 and 2016, many retail stores took advantage of this trend and acted quickly. They developed their own online stores in order to support their daily operations and further their business. Nonetheless, the trend towards the lowest price persists. No matter how much companies try to absorb extra taxes (e.g. increases in VAT), the consumers’ available income continues to shrink. As a result, the Internet has become a tool for searching for the best price. Nonetheless, many stores have managed to build loyalty among their Internet buyers through payment facilities, bonus programmes, free deliveries, special offers, etc.

According to research by IELKA (Research Institute of Retail Consumer Goods), 80% of Greeks are turning to lower-priced products, while 75% are reducing the products they used to purchase. The majority of consumers are more actively comparing prices, hunting bargains, and buying larger quantities. 

Also, more and more consumers are turning towards private labels, with 60% of shopping baskets including at least one private label product. 

The main factors influencing consumer behaviour regarding private labels are the risk (is the product good?), the price, the quality and the store that produces it.

Promoting the pet sector

As this illustrates, 2015’s uncertainty, both at the political and economic levels, has rolled over to 2016, but with less intensity. 2017 is expected to be more intense, in terms of direct and indirect taxes for consumers and companies. 

Undoubtedly, when a country falls into recession, life is hard for all. The bad thing about our sector is that there will be no increases in pet ownership, which is the basis for the growth of our market. Still, I maintain that this can change through co-ordinated promotion of our sector by non-profit organizations and companies regarding the real benefits that companion animals bring to our lives.

Humanization

Something else worth noting for 2016, and which will continue in 2017, is the humanization trend that seems to have dominated the Greek market. Regarding nutrition, pet owners want their animals to have the same food quality as they enjoy themselves. 

This implies that consumers will increasingly demand products with clear labelling, natural ingredients, and ingredients they recognize. They also favour so-called super-foods in their pets’ diets and, of course, practical, attractive packaging is always more appealing.

e-Commerce

As noted above, the Internet will expand as an information channel. It will also help small market players to confront multinational giants. What’s more, the development of online forums and review sites for pet products will also play an important role in shaping consumer perception, as consumers will be able to compare products, prices and stores easily and quickly.

Opportunities to be seized

Life has taught us that even in times of crisis and uncertainty, opportunities come to those who seek. What’s for sure is that consumers are changing as they try to adapt to the new situations. Today, they are being more wary and proactive in their purchases than ever before. It therefore remains to be seen who will take advantage of these changes in order to develop their business.