Additional costs for supermarkets due to pandemic at 96.1 mill. euros, IELKA survey finds

The cost of managing the pandemic for supermarkets in Greece is estimated at 96.1 million euros, from March to the end of September, according to the results of a survey by IELKA (Consumer Retail Research Institute), while the total cost for 2020 is expected to exceed 160 million euros.

More specifically, the cost of managing the pandemic is estimated to correspond to 1.55 pct of turnover, when the net operating margin of the industry for the last two years is 0.89 pct. In practice, it means that this new cost exceeds the net profitability of the industry, even in the most optimistic scenarios for its course. Besides this, the operating costs of the last two years for the sector correspond to 23.99 pct of the turnover, which means that this new cost increases the expenses of the companies by 6.49 pct, an increase that is very difficult to manage.

The largest share of costs comes from the additional labour costs, which are already estimated at 76 million euros. The main source of these costs is the new recruitments made by the supermarket chains until September 2020. The reasons for this development, according to IELKA, are multiple:

– Measures to limit the spread of the pandemic, such as extending the opening hours of stores, controlling the number of people entering the stores, disinfection, etc., have created new jobs.

– A significant percentage of store staff belong to vulnerable groups and with the onset of the pandemic they had to be protected and therefore new staff were hired to replace them.

– The utilisation of new sales channels, such as e.g. electronic supermarkets, telephone orders, created the need for additional staff to manage, execute and deliver orders. It is estimated that 15 pct of new hires relate to these jobs.

– The above developments cause additional investments in the organisation, computerisation and maintenance of the network, in order to increase the productivity of companies, which in turn create new needs for highly qualified staff.

The second largest cost category concerns home delivery, which is estimated at around one million euros by September 2020.

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