Food prices derail Greek family spending

Consumers are experiencing a constant shock from constantly rising  ahead of a bleak winter, as they now increasingly choose private label products, sale items and bulk food to fill their supermarket baskets only by half.

Prices rise for the 16th straight month

The upward trend of the “Food and non-alcoholic beverages” sub-index, which started last year in June, continued in September this year, as can be seen from the data of the Hellenic Statistical Authority, with the pressure multiplying for the economically vulnerable. It is recalled that poorer households spend more than 1/3 of their monthly budget (34.8%) on food.

Also read: Greek supermarkets and their suppliers lowering profits to keep costumers – The fears for 2023

Due to the higher prices, which are reflected in the extra turnover for supermarkets (sales reached 5.42 billion euros in value in the 8 months of this year compared to 5.23 billion euros in the corresponding period of 2021, according to the market research company IRI ), consumers are reducing the volume of their purchases, with the gap between the growth rate of sales value and sales volume widening month by month.

Also read: Supermarkets: Inflation reinstates private label products as leaders of the pack

In the January-August 2022 period, sales volume fell by 1.6% compared to the same period in 2021, while supermarket turnover increased by 3%, according to the latest available IRI data.

Increases of 19.3% in 11 months

It is characteristic that in a list of 25 branded products the total bill has risen by 19.3% compared to last November when inflation started to show its teeth.

Even excluding products that were disproportionately affected by the war in Ukraine, the appreciations are reminiscent of drachma times.

Specifically, from November 9, 2021 to October 5 this year, the average price of a liter of branded sunflower oil has risen by 90%, according to data from the Ministry of Development’s e-Consumer electronic platform.

As for corn oil (one liter) the increase reaches 41% in the same period, while a kilo of all-purpose flour is sold on the shelf 35.6% more expensive.

And if the price increases in the above products are expected due to the supply chain crisis, the high double-digit price increases in other products, in the categories of food, household goods and personal care and hygiene, show that price hikes due to energy costs have spread everywhere.

For example, the price for three kilos of potatoes has increased by 50.5% in 11 months. Correspondingly, for a 500-gram package of yogurt, the price hike reaches a rate of 46%, while for a 400 ml bottle of liquid dishwashing detergent, a rate of 38%. The rise in the price of 8 rolls of branded toilet paper (+38%) is similar.

Six medium eggs cost 33% more compared to November 2021, a liter of fresh milk is 22% more expensive, while the price for a 400g packaged slice of feta is 20% higher. An increase of 22.8% must be paid by the consumer for a 160 gram package of smoked turkey, while for sliced bread 8.5% and for the instant coffee 7%.

Third wave of increases

But the point is that shelf markups don’t seem to be stopping, with supermarket industry executives estimating that the average increase in the fast-moving code basket could reach as much as 15% by the end of 2022.

Product categories that are set to increase in price within October include poultry, frozen vegetables, dairy, cold meats, soaps – detergents – cosmetics, olive oil and stationery.

Smaller basket…

In this unprecedented situation, the Ministry of Development is proposing the “basket” of 50 basic products as a brake on what is yet to come, although everyone admits that this is a difficult exercise.

This is because the price increases in this list of products, which will include food (meat, vegetables, fruit, flour, dairy, coffee, oils, cereals, eggs, pasta, legumes, tomatoes, sugar, frozen, snacks, etc.) and non-food (detergents, general purpose cleaning products, stationery, personal hygiene products), are not prohibited. Nor is a “freeze” imposed. There is simply a commitment that the mark-ups are lower compared to the rest of the corresponding products and that new “go” on the shelf at less frequent intervals.

Moreover, in order to reach the goal of smaller price increases, the agreement of the suppliers should also be ensured, when the operating costs of the companies have soared due to energy and raw materials costs.

For this matter, the Minister of Development, Adonis Georgiadis, will have a meeting with industry representatives next week, while he assured the president and members of the administration of the Central Union of Chambers that the subsidization of electricity and natural gas bills will continue for all Greek businesses.