If last year at this time high prices were the focus of retail chains, this year the situation has changed. The pressure of high grocery prices is easing a bit and I don’t have as many challenges as last year. This was explained by the executive director of Billa Bulgaria, Vigintas Shapokas, during the company’s annual press conference.
Deflation
The retail chain reports a decrease in prices since the beginning of this year, and according to internal data, deflation for March was 2.6% compared to the same month last year. The most noticeable is the decrease in the price of fruits and vegetables – by nearly 11%, in dairy products – by a little over 5% and in cosmetics – by nearly 4%. Deflation is also reported for canned foods, beverages and basic foods.
Shapokas also explained that the company had to change the forecasts in its draft budget for this year, as it had initially expected mild inflation, but every month from the beginning of 2024 saw deflation. He added that the price reduction is expected to continue.
This year, the consumer basket for Easter in Billa will be about 2.3% cheaper compared to 2023. Or if the main products for the holiday cost BGN 49 last year, then this year they will be BGN 48.
Offers save us
In order to save themselves from high prices, consumers massively shop for promo offers and take advantage of loyalty programs. Special offers and the lower price are mainly sought, and premium products are less and less purchased.
50% of sales in the retail chain are on promotion, which is why the company is becoming more and more aggressive with its offers.
Shapokas explained that for the last two years they have been trying to change their policy so that both the pensioner and the millionaire can find the product for themselves in the store. The company is increasingly targeting lower and mid-range products.
Curiously, people’s desire to find more non-food items in stores is increasing. The main motive for their purchase is the convenience of being next to groceries.
For Bulgarians, the origin of food is important, preferring local products or those from a neighboring country.
Growth in turnover
Billa Bulgaria continues to grow, and for 2023 the turnover is up by 15%, reaching BGN 1.423 billion. The positive trend in the growth of the market share is also maintained – this year by 0.5 percentage points. Customers are also increasing, and for 2023 they are 5.4% more compared to 2022.
New investments in the amount of BGN 73.5 million are planned for this year. BGN 47 million will be invested in the new warehouse near the village of Zagore and it will be sustainable – 90% of the electricity for it will come from its own photovoltaic park.
The company is also growing in number of stores, and by the end of 2024, 12 more new sites will be opened. For the first time, the chain set foot in Teteven and Tutrakan. Billa maintains its position as the retail chain with the largest number of branches in Bulgaria. The company has 159 sites in the country.
