In recent years, the Rewe subsidiary Billa has enriched the Austrian retail sector with modern and innovative concepts. Last year, the growing food retail chain set new standards with the merger of Merkur and Billa Plus. Currently, a new franchise structure called Billa Merchants is being rolled out. At this year's producer congress ICOP Johann Regner, spoke about opportunities and challenges in modern retail.
From 2014 to 2021, Billa saw average sales growth of more than 6 percent per year in the fruit and vegetable category, and also grew by around 3 percent per year in volume. The pandemic had mainly had a positive impact on sales of fruit and vegetables, as more people cooked at home as a result of the restaurant closures. Nevertheless, the current inflation is also increasingly causing problems for Austrian retailers and is already leading to a slump in sales and volumes, Regner said. "We are feeling a certain reluctance to buy on the part of consumers, which in our view is due not only to the price trend, but also to the change in consumer behavior, i.e. the decline in home cooking."
Johann Regner during his presentation at this year's ICOP in Weiz.
From a longer-term perspective, three trends in particular play a significant role, first and foremost sustainability. Health, for example in the form of plant-based nutrition, and individualization, among other things through personalized items, are also tending to appeal more to consumers. Regner: "However, we are observing that customers are now increasingly turning to entry-level price products. Product availability is also becoming increasingly difficult: the production of domestic winter tomatoes, for example, will not be possible this year due to the immense increase in energy prices."
Regional diversity of supply
Sensible measures are being taken to try to meet the current challenges in procurement and marketing. Mutual partnerships between suppliers and retailers, well thought-out seasonal planning, constant exchange and communication, efficient and optimized logistics, and targeted promotions at the POS all play a decisive role. Billa also benefits from the advantageous business structure, Regner emphasizes. "Some of our goods are sourced within a 30km radius and we offer a wide range of regional products. In addition, we have a gigantic store network with a total of over 2,000 stores in a relatively small country like Austria."
According to Regner, Billa has established itself as a pioneer in many areas and will continue to pursue this strategy in the coming years. "We recognized the trend toward plant-based nutrition and sustainable packaging for ourselves early on and have responded accordingly. We also focus on sourcing fancy local products, again in the fruit and vegetable sector. In a nutshell: What grows in this country, we source." In this context, the Billa Genusswelt product line was also launched: Premium items are offered under this label and their added value compared to 'conventional' products is proactively communicated.
Billa Plus / Image: Billa
Premium instead of price entry
According to Regner, it is not necessary to simply adapt to the new circumstances, but to actively counteract them. "It is in no retailer's interest to destroy value creation. Accordingly, we try to continue to offer premium as well as medium-priced products attractively, so that the customer does not only resort to price entry."
Fo more information:
www.billa.at
www.linkedin.com
