Transform Your Retail Procurement Processes Today
Discover industry-specific solutions that cut procurement costs by 15%
At first glance, the Central and Eastern European retail market appears stable, showing moderate growth. However, digging deeper reveals a complex and challenging operational environment. According to the latest data from the Hungarian Central Statistical Office (KSH), retail turnover in Hungary grew by 2.6% in 2024, painting a positive initial picture.
But the reality is more nuanced. While the region's economy continues to expand, a Coface analysis highlights a worrying trend: corporate insolvencies are increasing year over year, particularly in the retail sector. This paradox points to deeper structural problems that pose a direct risk to supply chains.
Retail executives in Hungary today are performing a sophisticated balancing act. On one hand, the PwC Voice of the Consumer 2025 survey reveals that 64% of consumers in the CEE region cite price as their most important purchasing criterion, placing extreme pressure on margins. On the other hand, the growing risk of bankruptcy within the supply chain means that simply choosing the cheapest offer is no longer enough; ensuring reliability and resilience has become critically important.
Imagine every other customer walking into your store with an invisible price comparison tool, asking about every single product: "Why should I pay this much when it's cheaper at your competitor's?" This is the reality in Eastern Europe today. The PwC survey shows that two-thirds of the region's consumers prioritize price above all else—quality, brand, and convenience are all secondary.
This isn't just a consumer preference; it's an economic necessity that is rewriting the rules of retail. While Western European shoppers might still pay a premium for experience or brand loyalty, the Hungarian consumer is relentlessly pragmatic. Every cent not saved in procurement translates directly into a higher final price.
The CEO's dilemma is crystal clear: how can you protect margins when the market is mercilessly price-driven? The answer lies in procurement optimization. Every penny saved here directly strengthens your competitiveness.
With the rising rate of corporate bankruptcies in the region, every week brings a new risk. A partner who is reliable today could be insolvent tomorrow. The recent shortage of "Pilóta," a popular local biscuit, is a perfect example of how a single supplier's failure can leave shelves empty across an entire country.
This isn't just an operational inconvenience—it's a career-threatening disaster. The sudden bankruptcy of a key supplier can make entire product categories unavailable, leading to direct revenue loss and an irreplaceable erosion of customer trust.
While you're in the office making strategic decisions, various departments and stores are quietly bypassing centralized procurement. Emails, phone calls, personal connections—a parallel, uncontrolled purchasing universe can operate right under your nose.
This "maverick spending" isn't about small change. It can silently devour millions while you believe you have full control over your costs. Decentralized purchasing is not only more expensive, but it also hides compliance time bombs.
A new trend hits the market. Your competitor's shelves are already stocked with the hot new product while you're still stuck negotiating a supplier contract. Tender processes that drag on for weeks, manual email battles, endless coordination—by the time it's all done, the opportunity is gone. In the time it takes you to act, a trend is born, peaks, and dies. By the time the out-of-stock item is back on the shelf, it could be a museum piece.
Slow supplier management isn't an operational hiccup; it's the continuous gambling away of growth opportunities. In a world that demands you "move at the speed of culture," slowness is lethal. It literally burns through revenue potential. Every day spent on a complex procurement process for a trending product is a day your competition gets stronger.
CEE consumers are twice as likely to choose local products—a massive market opportunity. But where are these suppliers? There's no central database, no rating system, no transparent marketplace. Finding, qualifying, and contracting with local suppliers often turns into a months-long manual expedition through various databases and phone calls.
The local supplier ecosystem is like an invisible world: we know it exists, we know it's valuable, but we don’t know how to access it. Manual searches, personal recommendations, and guesswork—that's not a procurement strategy, it's a game of chance. Meanwhile, your competitors are dominating through their own well-mapped networks.
The consumer's price dictatorship demands the lowest prices. Supply chain instability demands the most reliable partners. These two demands are often in direct opposition. The traditional "lowest bid wins" model no longer works when the cheapest supplier could go bankrupt tomorrow.
Managing this duality without a stable and reliable procurement strategy is difficult. Without data-driven decision-making, it's an unsolvable equation. Relying on intuition is the same as gambling—and the stability of your entire company is at stake.
A hundred suppliers, a thousand documents, ever-changing regulations—welcome to the labyrinth of sustainability and compliance requirements. With manual systems, this is unmanageable chaos. An audit could suddenly reveal that a key partner fails to meet ESG standards. The consequence isn't just a financial penalty; it's a reputational catastrophe that can destroy years of brand value in a matter of days.
"We've been working with Peter for ten years; he's reliable." A significant portion of today's procurement decisions are still based on this single sentence. In the modern market, personal relationships are no substitute for objective performance data. Gut-feeling procurement leaves hidden millions on the table. Without data, every supplier decision is a bet. And you can't build a sustainable business model on bets.
While you're searching through spreadsheets, your competitors are using AI-powered systems to automate manual processes, optimize prices, and predict risks. This technology gap isn't just a gradual disadvantage—it's an exponential loss of competitiveness. A 25-30% increase in efficiency from AI-based procurement isn't a promise; it's a statistic. Those who don't adapt will be progressively pushed out of the race.
These pain points are not isolated problems; they are threads in a systemic web of risk. The solution isn't firefighting; it's a structural transformation, starting with the implementation of a modern procurement platform.
Imagine real-time control that eliminates maverick spending. AI-powered supplier monitoring that predicts bankruptcy risks. Automated tender processes that cut reaction times from weeks to hours. An integrated compliance dashboard with audit-ready documentation.
Stop treating procurement as a mere cost center. Your head of procurement should report directly to you. Anyone who controls 60-70% of company spending deserves a strategic seat at the table.
Put an end to gut-feeling decisions. Every supplier choice must be based on objective KPIs. This not only drives efficiency but also creates transparency and accountability.
A modern Source-to-Contract (S2C) platform is not an expense; it's an investment in your company's future. Every day of delay is another day's advantage handed to your competitors. The question is no longer if you need to change, but how fast you can execute it.
Modernizing your procurement process is no longer optional. It is a prerequisite for survival in a market where the dual forces of consumer price dictatorship and supply chain chaos are attacking every retailer simultaneously.
The question is simple: do you want to react to the crisis, or get ahead of it? Because those who fail to act today will be merely fighting fires tomorrow. And firefighting is always more expensive than prevention.
The race has already begun. The only question is whether you will finish as a participant or a casualty.
Procurement Software Evaluation Checklist - Detailed checklist to evaluate your software opportunities. The checklist includes:
Download the procurement software evaluation checklist here.
