"This is outrageous": Spar CEO Hans Reisch rails against shrinkflation

Spar CEO Hans Reisch criticizes the food and consumer goods companies for "shrinkflation". "The food trade is not to blame. The producers are doing this," Reisch said to journalists on Wednesday. "This is outrageous." The fact that product package sizes are shrinking while prices remain the same or even increase has been a topic of discussion for years. Reisch is critical of the planned law against "shrinkflation" because it would lead to more costs for retailers.

"Anti-Deceptive Packaging Law" Faces National Council

On December 9, ÖVP, SPÖ, NEOS, and Greens voted in the Economic Committee for the "Anti-Deceptive Packaging Law". Now the National Council must still approve it. According to the law, retailers will be required, depending on the size of the company or business location - limited until mid-2030 - to indicate either on the product, on the shelf, in the immediate vicinity, or via an information sign that the goods are affected by "shrinkflation". Small independent retailers operating five or fewer branches are exempt. They can comply with the labeling requirement by posting a notice, and for their branches under 400 square meters, the obligation is waived.

Spar CEO: No Market Power with International Corporations

At the beginning of the year, for example, the American food company Mondelēz International reduced the filling quantity of some Milka chocolate bars from 100 to 90 grams. However, the sales of Milka bars at Spar have not declined. The customer accepts it because they want the branded product, said the Spar CEO at the Club of Economic Journalists in Vienna. Spar has no market power against international corporations like Procter & Gamble, Johnson & Johnson, and Nestlé. There is no "shrinkflation" with Spar's own brands, according to the company head. The private label share at Spar is already over 40 percent.

The Spar CEO is dissatisfied with the heated "price discussion". Only the food retailers are in focus and not the energy suppliers. It is easy to "shift the blame" to the trade, criticized Reisch. "The consumer shops with us every day." Food prices depend on raw material prices, energy, and personnel costs, said the company head. If prices are significantly reduced, as is currently the case with butter, there is criticism from farmers.

Reisch "Very Satisfied" with Spar's Business Development in Austria

Reisch is "very satisfied" with Spar's business development in Austria. Next year, more locations are to be added in the country. Spar Österreichische Warenhandels-Aktiengesellschaft announced on Wednesday the acquisition of 23 Unimarkt locations to the Federal Competition Authority (BWB). The BWB now has four weeks to review the acquisition of the locations. An extension of two additional weeks is possible if the company requests it. "The withdrawal of Unimarkt also leads to a further increase in market concentration in the upstream supply chain, which is also taken into account by the BWB in the competitive assessment," said the Federal Competition Authority in a statement on Wednesday afternoon.

If the competition authorities give the green light, 23 Unimarkt branches are to be managed by independent Spar retailers. The Billa parent company Rewe wants to take over 21 Unimarkt locations and have them managed by Adeg retailers. However, Rewe has not yet registered the takeover with the BWB. Unimarkt, based in Traun, announced in September that it intends to sell all of its approximately 90 locations - both franchise and own - by the end of the year.

Spar aims to expand internationally, especially in Emilia-Romagna in northern Italy. Currently, it is only the seventh largest supermarket chain in this region, with the goal of becoming number three. According to its own information, Spar is the largest food retailer in Slovenia and ranks third in Croatia. In Hungary, Spar is burdened by the special tax on supermarket chain profits, which is being challenged at the EU level, and the margin restrictions for foreign food retailers.

"Significant Additional Effort" Due to Single-Use Deposit

The introduction of the single-use deposit in Austria for aluminum cans and single-use plastic bottles at the beginning of 2025 has led to "a significant additional effort for the staff" at Spar. The supermarket chain has invested around 60 million euros in deposit machines and renovations. According to the information, the single-use deposit has also led to a change in shopping behavior. Since the introduction of the deposit, a third fewer cans have been sold, explained the Spar CEO. The decline in cans is not felt in sales because customers are buying more bottles and other beverages - such as spirits.

Future of Spar Subsidiary Hervis Unclear

The unprofitable Spar sports retail subsidiary Hervis is currently divesting its branches in Hungary and Romania. The British Frasers Group, formerly Sports Direct, is taking over - subject to antitrust approvals - Hervis Hungary with 29 branches and Hervis Romania with 49 locations. The Spar CEO remained reserved about the further future of Hervis in Austria, Slovenia, and Croatia. Once the sale in Romania and Hungary is "over the stage," further decisions will be made.

Grocery Home Delivery Permanently Discontinued

Spar has completely withdrawn from grocery home delivery by the end of August. Reisch sees "no business model" for online grocery retail in Austria. The Click & Collect business with online pre-ordering and pickup on-site at the supermarket is currently being evaluated by Spar.

(APA/Red)

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