Inflation: prices at supermarkets went down c in July, IELKA survey shows

Supermarket prices for consumer goods also went down in July.

Speaking to the Athenian Macedonian News Agency, the general director of the Supermarket Association of Greece, Apostolos Petalas, explains that the prices of more than 1,300 mass consumer products sold in supermarkets are cheaper than a year ago. “This particular development is the result of the deceleration of prices internationally and of the measures taken by the government to address the issue of price inflation, Petalas stresses, adding “the trend of deceleration will continue in the coming months, both in Greece and in EU countries.”

According to a survey by the Institute for Research on Consumer Goods Retailing (IELKA), supermarket prices in May were down 1.25% on average on an annual basis. At the same time, of the 23 categories examined in the survey, 14 recorded a decrease and 9 an increase. In June, supermarket inflation was negative at -1.92% year-on-year in supermarket chains. Of the 23 categories surveyed, 13 recorded a decrease and 10 an increase. Regarding July, according to Petala, the first data indicate that supermarket inflation will be negative by more than 2%.

Speaking to APE-MPA, he said that the government has taken various measures which, some to a greater and others to a lesser extent, have had a positive impact on the price deceleration. In this context, the measure to discourage product revaluations was decisive, as were the decisions taken on detergents, personal care products, and household cleaners, where legislative intervention reduced the suggested retail price by 15%. “And the government’s measures have helped to bring down prices in supermarkets. Of course, the main reason for the deceleration of inflation is the international trends, because the deceleration of inflation is an international and European phenomenon.”

The Greek supermarket basket on the map of inflation

At the same time, a study by the BoE reveals that Greece is one of the most expensive countries in the Eurozone for branded standard supermarket products, with differences reaching 129% for sparkling water, 50% for ground coffee, or 56% for long-life milk. According to the study, on average, Greece is on average 10% more expensive than the Eurozone average across a range of 41 categories of branded standardized products. The high prices largely reflect, as noted in the study, increased concentration in the supplier market, where large multinationals are active and supply the market with imported products, distortions in the retail market, as well as differences in consumer habits, such as the purchase of small packaging.

Focusing on the results of the CBE study, Petalas, speaking to APE-MPE, expressed his strong concern. As he notes, the conclusions of the CBE study are significantly different and conflicting compared to a corresponding study by IELKA.“Both the Union and IELKA accept that the CBE study team is excellent and the validity of its research is very reliable. However, we are concerned by the conclusions of the study. Our impression is that the data available to the BoE are several years old so the study does not reach any firm conclusions. We are also concerned about the methodology of the approach, i.e. whether it takes account of consumer habits. Another issue is the weighting of product categories. For example, the BoE in the survey mentions two categories that are not important for the Greek consumer. One is sparkling water and the other is filter coffee. These are two categories that are not consumed in the Greek market to the same extent as abroad. Moreover, the same study states that olive oil in Greece is scarce compared to other European countries” underlines Mr. Petalas.

For all the above reasons, according to Petalas, the conclusion of the BoE study that prices in Greece are on average about 10% higher than in the Eurozone is opposed to the study by IELKA which uses updated data, weighting the categories and using a variety of products as a sample. He said that the GCC has requested a meeting with the CBE research team to discuss all the above issues. The meeting will be held in early September.

It is noted that the IELKA recurring report conducted in Spring 2024 presents the results of an organized price comparison survey (based on data from price comparison platforms in each country, as well as price surveys from supermarket chains) on a typical household basket of products of organized food retailers (supermarkets) in Greece and respectively in France, the UK, Spain, Italy, Portugal, Germany, and Romania. The price comparison is made with and without the value of VAT, which differs in each country.

For the analysis, prices in a total of 43 product categories were compared, namely 20 subcategories of products that make up a typical shopping basket, 18 subcategories of products included in the household basket from 11/2022, and 5 subcategories of products included in the household basket from 3/2023. These product subcategories are examined from a significant sample of over 6,000 product prices and 40 different supermarket chains in the eight countries in total to calculate average prices, with sampling from authoritative price comparison sites in Greece and abroad, as well as from supermarket chains.

The comparison of average basket prices shows that all five countries have significantly more expensive average baskets than Greece, 24% for Germany, 20% for France, 25% for the UK, 16% for Italy, 7% for Portugal, while Spain and Romania are quite close to Greece but more expensive by 5% and 1% respectively.

The picture of the results changes significantly when we subtract the proportional VAT by country to get an idea of the actual prices of supermarket products. Comparing the baskets in this case shows that all six countries have a more expensive average basket than Greece, Germany by 31%, France by 28%, the UK by 33%, Italy by 24%, Spain by 12%, Portugal by 10% and Romania by 6%. This is a result of the difference in the low VAT by country (this is VAT on food and drink). In Greece, this VAT is 13%. The VAT is significantly higher than the UK (0% or 5%) and France (10% and 5.5%), Spain (10% and 4%), Portugal (13% and 6%), Italy (5% and 4%), Germany (7%) and Romania (9%), but also most EU countries. The main difference is that foods that in Greece are subject to a high VAT rate of 13%, in other countries are subject to a low VAT rate, which is also lower than the Greek rate of 6%, 5.5%, 4% or even 0%. It should be noted that the effect of excise taxes (e.g. coffee) cannot be included in the above figures.

Supermarket turnover increased in the first half of the year

In the first half of 2024, turnover in organized food retailing (food stores over 100 sqm, Mainland Greece, Crete & the June & Aegean Islands) was up 3.4% year-on-year. According to NielsenIQ’s latest market data (YTD data to 30 June 2024), the key driver for this growth is fast-moving consumer goods, which account for 70% of organized retail sales and grew by 3.6%. NielsenIQ data shows that it is demand that is driving the growth of fast-moving consumer goods (3.3%), as the average basket price only marginally increases by 0.3% in the first half of the year. Average price growth rates are decelerating month by month: The six-month increase comes only from the first quarter (+1.0% year-on-year), while the second quarter registers a deflationary trend (-0.5%).

The same data show that only in the super-categories of standard food there is growth in their average price (+1.2%), while in the super-categories of non-food, there are now deflationary trends, compared to a year ago, with home care products having reduced their average price by -4.6%, and personal hygiene and beauty products by -3.2%.

Private label products continue their upward trajectory, having increased their sales levels in value terms by 4.7% and reaching, for the first half of 2024, a market share of 25%. Private Label products as a whole saw a notable decline in their average price by -2%, with volumes sold of these products increasing by 6.7% and gaining more space in the household basket.

At the same time, the promotional intensity continues to be particularly high, however, it remained basically stable compared to the 2023 total at 68.6%.
It is also worth noting here that in the non-food categories, there was a decline in the percentage of products sold under some kind of promotion, as recorded by NielsenIQ.

At the same time, the online supermarket channel holds a stable position in consumer purchasing behavior, with Greek households continuing to choose online stores for their needs. According to the report published by Convert Group, for the first half of 2024, the growth in turnover of Online Super Markets was 7% and reached 164 million euros in retail prices including VAT, not including Q-Commerce players with their own warehouses such as eFood Market & Wolt Market that are constantly gaining share in the Greek market.

Also noteworthy is the 6% increase in pieces per basket, meaning consumers placed 34 instead of 32 pieces in their online order compared to the same period in 2023. The average value of goods purchased online increased by 3% compared to the same period in 2023, which saw a 9% increase compared to the same period in 2022

Compared to the same period in 2023, the categories that increased in value (Euro) of online purchases in the first half of 2024 were: +15% in beverages and soft drinks, +14% in pet products, +10% in frozen food, while packaged food increased in value (Euro) of online purchases by 7%.

The total number of products sold in the EU increased by 10% (+10%) and the total number of products sold in Europe increased by 10% (+10%) in the food category (+10%).
It was also observed that the percentage of spending going to private-label products accounted for 15% of all online purchases made in the first half of 2024. It was noted that Friday was the most popular day for online household shopping, with 16.8% of total orders placed on that day.

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