Variety Stores in Italy

2020 IMPACT

Category declines as consumers cut spending

Variety stores was hit hard by the COVID-19 pandemic as the health crisis and its economic ramifications prompted consumers in Italy to cut their spending. The Two month initial lockdown period following the outbreak of COVID-19 in Italy in March 2020 had a particularly negative effect on variety stores as sales were heavily reduced and many players also faced stock issues as manufacturers adapted to conditions under COVID-19.

Essential purchases and e-commerce prop up sales during tough times

Despite the fact that many Italian consumers saw their spending power considerably reduced in 2020, retail current value sales from variety stores were propped up by the continued importance of essential purchases which can be made through retailers in this category. As such, consumers never stopped visiting variety stores in 2020, even during the peak of the pandemic.

Variety stores face mounting pressure from small Chinese-owned stores

Variety stores face increasing competition from small Chinese-owned stores. Following the previous economic crisis in 2008-2009, Italy witnessed the emergence of many family-owned variety stores run by Chinese entrepreneurs across Italy and especially in urban centres.

RECOVERY AND OPPORTUNITIES

Variety stores will need to adapt to the new normal

Italian consumers are expected to continue to change their purchasing habits as a result of the COVID-19 pandemic. These changes, however, are expected to outlast the health and hygiene threat that the COVID-19 virus poses to consumers as the lengthy periods of lockdown and the ensuing economic crisis will drive a wider shift in consumer purchasing trends and lifestyle habits.

Proximity to urban centres will be key to success as consumers look for convenience

During the forecast period, variety stores are expected to focus on proximity as they expand or reconfigure their retail networks. As such, players are expected to focus on developing a larger number of smaller stores located in more convenient settings in large cities.

Players to enhance the virtual shopping experience through omnichannel approach

The virtual shopping experience in variety stores is expected to become more and more unique and functional in the forecast period. Players are also expected to focus on integrating digital services with in-store services to enhance their omnichannel approach to sales in the coming years.