With the Easter season now over—during which supermarket shelves and refrigerators remained largely stable despite earlier fears—the market is entering what insiders describe as a “high-risk zone.” After six weeks of war in the Middle East and the collapse of the latest peace talks, the international environment is once again turning bleak.
Oil prices continue to climb, and the energy market is placing unbearable pressure on businesses. As is widely known, most suppliers of consumer goods refrained from raising prices during the Easter period, choosing instead to participate smoothly in the intense “war of offers” that characterizes holiday retail. However, they had already signaled that they would reassess their commercial strategies after Easter. In the meantime, they absorbed the excess costs caused by rising energy prices—costs that affect everything from operations to transportation.
For many companies, however, the situation created by the war in the Middle East is far more complex than it appears. Export activity to the region has already been suspended. While the bulk of Greek exports to the area consists of fuel, for companies exporting other products, the revenue loss is still significant.
This creates a double burden: on the one hand, declining external sales; on the other, rising operational costs. In such cases, price increases are no longer optional—they are inevitable. Even for companies without direct exposure to Middle Eastern markets, the ability to absorb additional costs has its limits.
As a result, it is now an “open secret” within the market that the coming weeks will bring a wave of price hikes. Importantly, these increases are not expected to boost profit margins, as a government-imposed cap on gross profit margins—introduced through an emergency legislative act—remains in force.
At the same time, existing regulations stipulate that if a company raises prices, it cannot promote any subsequent price reductions as “offers” to consumers.
Nevertheless, the pressure from rising costs—and the necessity of passing them on—outweighs the benefits of maintaining promotional campaigns for a limited period, such as three months. At least, that is the view expressed by market sources.
Profit margins under scrutiny
Meanwhile, regulatory oversight is intensifying. As previously reported, Greece’s Independent Authority for Market Supervision and Consumer Protection has requested detailed data from 110 companies—57 of which are food manufacturers—on their gross profit margins, broken down by product, and how these margins are calculated.
The original deadline for submitting this data expired today. However, companies were unable to prepare the required documentation in time and requested an extension. According to sources within the authority, the deadline is expected to be extended until next Monday, after which inspections will begin.
Notably, the same sources expressed skepticism about the scale of the cost burden claimed by suppliers, suggesting that it may be manageable—particularly in the context of protecting consumer income.
Taken together, these developments point to a critical phase for Greece’s consumer goods market. With global instability driving costs upward and regulatory pressure mounting at home, businesses and consumers alike are bracing for what could be a difficult—and more expensive—period ahead.
Source: tovima.com
