Supermarket: Provisions for a reduction in prices up to 2%

Mild reduction will be recorded in their food by 1% – 2%, according to what the President of the Hellenic Supermarket Association (ESE), Aristotle Panteliadis said in yesterday’s (21.11.2024) briefing of journalists. In particular, the President of the Hellenic Supermarket Association stated that prices have stabilised at a high level due to the high price increase over the last three years and this will not change. “Prices cannot all be returned to the level that was three years ago,” stressed Mr Panteliadis, proposing as a solution to the problem the increase in wages, a proposal already being implemented in the Greek economy. “There were significant increases (wages) in 2023, 2024 and apparently will be in 2025. Wages are now rising quite, at rates significantly faster than inflation,” he said. ‘Price increases must be accompanied by productivity growth’, the President of the ERC stressed, pointing out the impact of climate change on production and therefore on prices. Because of the climate crisis, production faces many difficulties at global level. “We see it from time to time in various products, as we are now experiencing difficulties in cocoa that drought has reduced production. We faced it last year in olive oil, to a very significant extent,” noted Mr Panteliadis. And what’s the result? Unforeseeable cost increases in various products, “unforeseeable because today they are one product and tomorrow they are the other. This is the big problem with climate crisis,” he commented. As far as olive oil is concerned, he said that de-escalation has begun this year and estimates that its price will start to fall from 2025 depending on the rains. Greece’s basket (excluding VAT) is cheaper than other countries Significantly cheaper baskets appear to have Greece, if VAT is not included, compared to Romania, Spain, Portugal, Italy, France, Germany and the United Kingdom, according to figures of 12 years of IELKA. It is noted that price comparison with Europe takes place 3 times a year, for 8 countries, in 44 supermarket chains, in 42 product categories with over 6,000 product codes. At this point, the Director General of the ESRE, Apostolos Petalas, said that VAT needs to be “the average of Europe, neither above nor below”, with the president adding that it would be beneficial to reduce (VAT) gradually to certain categories of products in our country, such as in the example of Cyprus, which zeroed it in certain categories. An additional factor that costs, taxes and the ability to operate supermarkets properly are the destruction of public and private property and infrastructure, as in the case of Daniel who had flooded supermarkets. It is also necessary to abolish restrictive measures that had been applied in previous years, such as the ‘basket’, as consumers have lost interest, according to the Board of Directors of the ESR. However, the position of the most unfair measure for companies and consumers is taken by the profit margin, because “the one who once had a greater profit margin and was undermined by the lessee,” according to the President’s words. With a declining trend, profitability 2021 – 2023 Based on the analysis of data from IELKA’s 2023 supermarket chains balance sheets for 2024, the net profitability of Greek supermarket companies is extremely low and declining, since the net margin before tax rose from 2.22% in 2021, to 1,47% in 2022 and 1.80% in 2023. Nevertheless, sales of supermarket chains increased by 10,12% in 2023, reaching EUR 12,2 million compared to EUR 11,1 million. At the same time, operating costs are steadily increasing due to an increase in employment, energy and logistics costs, while the liquidity of the industry is marginal and borrowing increasing (by 6.33% in 2023 compared to 2022). The retail sector plays a very important role in the Greek economy, employing dozens of workers. There are, however, problems with finding staff at supermarkets, for which the president of the union commented that “this summer the situation was a little better. Mostly in tourist places things are hard.”