3) Promotions everywhere
The pressure on prices has increased dramatically in 2021 and one very visible effect is the number of promotions we now see EVERYWHERE.
For instance in Spain we have observed how retailers have engaged in a price war starting at the end of 2020. The move happened as Lidl grabbed the third place in market share behind Mercadona and Carrefour. The German retailer is known for its aggressive pricing and its ongoing growth could very well have been the trigger for this price war.
In an economic environment where we start to see a small pick-up in inflation this price war might turn out to be very expensive for both retailers and manufacturers! Additionally, the easing of lockdown measures and the comeback of “out-of-home” consumption might put more pressure on retailers that might not be growing as fast.