The prospect of something approaching a social revolution in Europe – that’s right, Europe, not the Middle East – was becoming more likely in late September when it became apparent that Greece, in order to continue being bailed out by the EU, ECB and IMF, would effectively have to lay off 150,000 of its 700,000 public sector workers by 2015.
The country's unions are spitting feathers, while the public at large is already sick to the back teeth with rising prices, falling wages, higher taxes and smaller pension reserves. At some point, these people are going to get very angry indeed. While the likelihood remains slim, it’s by no means certain that this won't happen elsewhere too – in Italy or Spain, perhaps – should the economic headwinds become too strong.
For its part, this industry needs to be prepared for upheaval in terms of how consumers buy their food. Across the Adriatic, the net results of recent austerity measures in Italy are reportedly already being seen and a notable number of consumers are voting with their well-worn credit cards. As our interviews this month with Germano Fabiani of Coop Italia and Claudio Gamberini of Conad – two of the country's most important fresh produce buyers – suggest, more Italian shoppers are now basing their purchasing decisions on price.
As a result, retail operators have kicked discount promotions into overdrive and are spending a huge amount on advertising those lower prices. Consumers themselves are trading down, shopping more often in discount-led stores and, increasingly, taking matters into their own hands by clubbing together and buying fruit and vegetables at wholesale level. Bypassing the retail supply chain, they’re cutting out a significant amount of cost. When it comes to the crunch, the loyalty of consumers to retailers could end up being worthless.
