IELKA: Prices in supermarkets on a downward trend in August - Where the biggest reductions are recorded
Thursday, September 26, 2024
Negative inflation was recorded in supermarkets in August, the fourth consecutive month, according to a survey by the Institute of Consumer Goods Retail Research (IELKA). Supermarket product prices were recorded down by an average of 1.08% compared to August 2023, while 14 out of 23 supermarket product categories recorded price decreases.
More specifically, the net decrease in the supermarket chain price trend index in August 2024 shows that supermarket chain inflation is negative at -1.08 (vs. -1.56% in July, -1.92% in June. -1.25% in May, +1.10% in April, +0.28% in March, +2.70% in February and +3.00% in January 2024). According to the survey, the change in August is mainly due to the ongoing price deceleration and partly to the effect of seasonality due to the summer.
Largest price decreases were recorded in the categories: detergents and cleaning products (-6.68%), paper, cosmetics and toiletries (-5.16%), pet food and supplies (-4.78%), baby and child food (-4.28%), fresh fruit and vegetables (-2.84%). Fresh fruit and vegetables have benefited from the comparatively better weather conditions in early summer compared to 2023. In other species, the decreases recorded are the result of both the normalisation of the market following the pandemic and the reduction in producer prices for some products. Largest increases are recorded in the categories: appetizers, salted and other food preparations (+5.52%), fresh fish and seafood (+5.09%), groceries (+3.51%), biscuits, chocolates, confectionery (+3.41%), alcoholic beverages (+2.07%). Most of these items are affected by seasonal summer demand (e.g. fish, alcoholic beverages) and international raw material prices, sugar and cocoa prices and other production costs. It is noted that out of the 23 categories examined, 14 showed a decrease and 9 an increase.
According to IELKA, the reasons for the trend of restraint in supermarket product prices are:
-Gradual disinflation. Prices have been declining in recent months in large food stores due to the large volumes of products they handle, economies of scale, their organisational/technological readiness and the range of private label products.
-The evolution of raw material prices in recent months on international markets and the normalisation of the market. International food commodity indices (e.g. FAO Food Price Index) record a decline in the first months of 2024 in most cases. In cases such as coffee and cocoa, however, the effect is reversed.
- Better weather conditions in 2024 compared to 2023 and seasonality. Last year’s rains had significantly increased costs in fresh fruits and vegetables. At the same time, seasonality in the products of the category has a greater impact on the overall index.
- Government institutional interventions. Supermarket chains operate within a strict institutional framework (e.g. prohibition of promotions in case of price increases 6969/2024).
- Offers and discounts. Offers and discounts in the organised retail channel are more in number, intensity and percentage discount, which affects the final prices of products.
- High inventory turnover rate. Price moderation occurs much more quickly in large outlets due to higher inventory turnover. That is, they move their inventory more quickly and make new purchases to replenish inventory more quickly.
- Effect of private label products. Sales shares of private label products are higher in large supermarket chains due to a wider range of codes and have been increasing over the last two years.
CFCI: Measures to reduce inflation are gradually paying off
Measures to deflate food and basic living inflation are gradually paying off on the shelf, but it is clear that we are not complacent. We continue to fight the daily battle, together with healthy business and consumers who must choose wisely, for the benefit of the average Greek family and society as a whole.
This is what the Ministry of Development noted commenting on the index of the Institute of Consumer Goods Retail Research (IELKA).
The Ministry of Development, moreover, stresses that it is closely monitoring the market with daily and intensive checks for compliance with the measures. The effort to de-escalate prices and increase the disposable income of all our fellow citizens continues with the same intensity and determination.
According to the data, for the fourth consecutive month, negative inflation has been recorded in supermarkets. Product prices are down by 1.08% compared to August 2023. It should be noted that the relevant index of the Institute of Consumer Goods Retail Research (IELKA) was -1.56% in July, -1.92% in June, -1.25% in May.
Source: Capital.gr, 30th of August 2024.