B. Korkidis: How and to what extent the market can limit the autumn food increases

In September, new price lists are being prepared to be sent from suppliers to retailers, with adjustments to basic food items and other supermarket items, notes the president of the Piraeus Chamber of Commerce and Industry, Vassilis Korkidis, in the chamber’s weekly electronic newsletter.

Mr. Korkidis states the following in detail:

September is traditionally the month when many increases in the food industry go from “field to shelf” and from there to our table. The July-August markups in production are expected to hit store shelves in September and depending on the stocks they have in their warehouses.

After so many months of energy crisis, the margins for absorbing the increased prices have been reduced to nothing, as the liquidity and financial sizes of the companies are constantly decreasing. Fear has begun to dominate consumers due to the energy precision that is on the market with the decrease in demand.

It is worth noting that due to discounts, inflation fell to 11.6% in July, putting the brakes on a frantic upward trend, from 12.1% in June, with fuel and food prices continuing the upward trend of the previous months and are responsible for CPI levels. Specifically for energy products, natural gas recorded a price increase of 178.9%, heating oil 65.1%, electricity 55.8%, finished oil products by 33% and solid fuels by 9%.

Only fuel price increases contributed to the increase of the Consumer Price Index for July by 6.43%. But apart from fuel, increases greater than the general CPI register a number of products and services of daily consumption. Increases are recorded by 27.3% in oils and fats, 16.7% in meat and cereal prices, 16.4% in eggs and dairy, 13.4% in vegetables, 11.4% in sugar, coffee and tea, 9.3% chocolates and 5.3% fish.

The first half of 2022 closed on a positive note for the supermarket market, with a 1.6% increase in the value of fast-moving products sales compared to the first half of 2021. This is the result of price increases, which in some categories of products reach 9%, while on the contrary the volume of sales decreased overall by 2.2%.

This fact is also explained by the inelastic demand of certain products, i.e. consumers, no matter how much the prices increase, it is not easy to reduce the quantities they buy when we are talking about essential goods. After the two months of July-August, another cycle of increases will begin, which will continue in September with adjustments to basic food items and other supermarket items, with the sending of new price lists from suppliers to retailers.

The individual data show that households are cutting back even on essentials, such as dairy products, whose sales decreased by 5.6% per product unit, while on the contrary their prices increased by a total of 6.2%. Due to war the increases have literally multiplied in flour and sunflower oil.

To these have been added the old feed stock prices with the new price increases, and the continuation is anything but encouraging. The increased prices on more than 500 consumer goods, such as food, will hit the shelves in September. High inflation has alarmed the government’s economic staff, which is looking for ways to limit increases in basic goods.

The price hikes concern at least 40 categories, with the average increase amounting to 10% to 15%. In the meantime, the almost 15% increase in the prices of imported products in the food industry is offset by the decline in wholesale prices of fruits and vegetables recently.

Operating costs are putting a strain on producers with high oil, electricity, fertilizer and animal feed prices continuing to rise.

According to the industry, the percentages with the estimated increases that will come from September are as follows: Canned food +15%, cosmetics +25%, dairy +12%, margarine +20%, cured meats +10%, confectionery biscuits +20% , ice creams +5%, detergents +15%, care products +18%. However, what should not concern us in the Greek market is that they are not observed and we will not have shortages.

Source: RES-MPE