LARGE-SCALE DISTRIBUTION CENTERS REGISTER A DECREASE IN EARNINGS IN ORDER TO “SAVE” CONSUMERS FROM UNCONTROLLED INFLATION. COOP: -43% IN PROFITS FOR 2007. FEDERDISTRIBUZIONE: “WE ARE A CUSHION”

Large-scale distribution is giving a hand to Italian consumers who are finding it increasingly hard to cover the rising costs of living. The large supermarket chains associated with Federdistribuzione, like the COOP, have adopted a sort of deflationary strategy to help consumers overcome difficulties with recent food price hikes. This strategy, however, has not come without consequences: the COOP has, for example, registered a heavy fall in profits of 43% in 2007.

“We want to maintain the interests of the people in light of the increasing costs of living”, stated the vice president of COOP Italia, Riccardo Bagni, who also emphasized the positive trend in earnings by the group (+6% in 2007).
The policy of a fair price, or rather, a price that remains under the average inflation trend, has been adopted within the context of strong sector competition that has begun to offer their own ways for consumers to save: the supermarket Crai has set up a bulk goods section where consumers can save between 10 and 70%, and it also offer 3% discounts to senior citizens.

Federdistribuzione notes that production costs have risen by 8% in recent months, while sales prices have risen by only 3 or 4%. Still, between 2003 and 2007, the increase in costs and services has risen by 17.8% while inflation rose by 8.2% but large consumption goods on supermarket shelves have risen by only 1.8%.

This deflationary role by large-scale distribution (GDO) obviously creates tension, according to Federdistribuzione. “The safeguarding of the power of acquisition is fundamental to our mission”, emphasized Federdistribuzione and will continue to keep its prices contained.

It is a policy that will reward those who practice it most seriously because according to the latest ISTAT survey data there has been an increase from 8.6 to 9.7% in the number of families who have turned to “hard discount” supermarkets when acquiring food products.