Financing the operations of traditional grocery retailers amidst rapidly growing operational expenses and keeping pace with modern grocery retailers in terms of price remains difficult for many players, and this was especially the case during COVID-19. The pandemic accelerated the change in how people shopped.
During the pandemic, traditional grocery retailers demonstrated higher flexibility than larger retailers and sought alternative locations and channels to sell their products. For instance, players such as bakeries, greengrocers, artisan food manufacturers and farmers realised that having a stall at open-air markets was a viable option.
The COVID-19 pandemic transformed shopping habits, leaving many traditional grocery retailers in trouble. Unfortunately, the continuation of the pandemic, with further waves of the virus in 2021, maintained the trends already seen.
The revitalisation of rural settlements is a high priority for the government, and saving grocery retailers which are on the verge of closing is a must to keep these locations attractive and halt the decline of the population in rural areas. The erosion of outlets is an age-old problem, and the fourth round of the Hungarian Village Program in 2021 secured a HuF45 billion subsidy for the purchase and/or reopening of outlets, wage subsidies and asset procurement, aiming to improve shopping facilities in the neighbourhoods where people live.
The price of traditional tobacco products is soaring, and sales revenues are growing mostly due to price increases, whilst volume sales are declining. Tobacco store operators such as the leading player in traditional grocery retailers, Nemzeti Dohánybolt, are adapting to the new circumstances with more of a focus on alternative tobacco products and beverages (mainly energy drinks and alcoholic drinks – mostly beer).
Traditional grocery retailers is expected to remain a highly cluttered channel with only a few chains, due to a lack of franchising. However, chained players, such as the bakery Lipóti Pékség, and some other professionally managed emerging brands with a regional presence, are here to stay in the longer term.
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Understand the latest market trends and future growth opportunities for the Traditional Grocery Retailers industry in Hungary with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Traditional grocery retailing is the aggregation of those channels that are invariably non-chained and are, therefore, owned by families and/or run on an individual basis. For Euromonitor traditional grocery retailing is the aggregation of three channels: Independent Small Grocers, Food/Drink/Tobacco Specialists and Other Grocery Retailers. While there can be modern (i.e. chained) food/drink/tobacco specialists or other grocery retailers, due to the store's presence in the channel, these stores are still considered as traditional for Euromonitor International.See All of Our Definitions
This report originates from Passport, our Traditional Grocery Retailers research and analysis database.
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