An examination of food distribution and specialised retail sales in Portugal

Abstract

The food retail sector in Portugal is mostly concentrated in five main players holding 69.6% of its market share, with two groups leading the Portuguese preference, Continente with 21.9% market share, Pingo Doce with 20.8% market share, followed by Jumbo, Lidl and Intermarché with 9.5%, 8.8% and 8.6%, respectively. These operators up to the year 2012 have guided their performance and price strategy by applying the strategy Every-day-Low-Price that privileges the application of low and stable prices. In this paper we aim to characterize the food retail market in Portugal after the year 2012, identifying the main factors and contextualizing the economic climate. This analysis takes into account that most retailers opted to follow a strategy of high low pricing, which determined that 47% of sales of the year 2018 correspond to promotional sales; in this way, we will devote the analysis of the promotion and the impacts that it has for forecasting sales and supply chain management. Thus, to evaluate the influence of promotions on global sales, we will use weekly data referring to sales in the hypermarkets & "Superstores" channel that includes hypermarkets> 2,500 m2; Supermarkets 400-2,500 m2; Proximity <400 m2, in the period between the first week of 2012 and the last week of 2018, and also data on the number of promotions printed on promotional leaflets on the same the period in question. Applying multiple linear regression models and a previous exploratory analysis of the data we can conclude that the promotions carried out via leaflets actions have a weak capacity to explain the sales obtained in the Hypermarkets & Superstores channel and that are explained in large scale by other variables and the impact of these variables should be object of study in future works.