In Downward trend are located prices of consumer products in supermarkets with market players estimating that this trend will be dominant in the coming months as well. In accordance with Consumer Goods Retail Research Institute (IELKA) the prices of products in supermarkets are recorded for the first time decreased by 1.25% in May compared to the corresponding month last year.

Speaking to APE-MPE, Mr general manager of the Union of Supermarkets of Greece, Apostolos Petalas, points out: “It is a fact that inflation both in Greece and in the rest of the EU countries has a downward trend that started last November and is gradually continuing. This is true for both headline inflation and food inflation. Especially in Greece, and especially in May, we had a significant de-escalation of overall inflation, while it is expected, based on the ELSTAT data to be announced in mid-June, a significant de-escalation in the inflation of food and consumer products as well.”

Focusing on the results of his research IELKA, Mr. Petalas notes that “especially for food and consumer products sold in supermarkets, the de-escalation is much greater. In other words, we have deflation with an overall drop in prices.” According to him, this development is not surprising. As he explains, “It’s something that was gradually happening all the previous months in organized retail.”

According to Mr. Petalas, the measures taken by the government to deal with punctuality have also contributed to the de-escalation of prices. Specifically, as he states, “both in the EU and in Greece, the governments have taken measures which affected the general de-escalation trend. The Greek government has taken various measures which, some to a greater and others to a lesser extent, positively affected this de-escalation. In this context, the measure of discouraging product mark-ups was decisive, as well as the decisions taken for detergents, personal care and home care products where, through legislative intervention, the proposed selling price was reduced by 15%.

In fact, he argues that “the de-escalation and possibly deflation in supermarkets would be even greater if there were not certain categories of basic products that are affected by the climate crisis such as sugar, olive oil, coffee, cocoa and also the production of citrus fruits”.

In any case, Mr. Petalas estimates that “the de-escalation trend will continue in the coming months both in Greece and in the EU countries”.

It also emphasizes that the impending rate cut in the coming months will soon be discounted by the market and reflected in the price level. “We can expect a de-escalation of inflation for one more reason. It is now assumed that the interest rates of the European Central Bank will fall in June and this signals a greater relief in borrowing costs”, says the general director of the Union of Supermarkets of Greece.

K. Skrekas: Inflation is de-escalating, the measures are paying off

The belief that the government’s measures against accuracy and in favor of limiting price increases and cases of profiteering, which are already yielding results, create the conditions for further de-escalation, was expressed, in recent statements, by the Minister of Development Kostas Skrekas.

“We are shielding Greek households by raising incomes, continuing market controls, and taking structural measures that correct chronic structural pathologies. We are not complacent, we continue unwaveringly until the prices on the shelf stabilize and de-escalate”, said the minister recently on the occasion of the announcement of the European Statistical Service (Eurostat) on inflation in May while commenting on the findings of an IELKA survey that found reduced prices in supermarkets this year, in May compared to the same month last year, he underlined that the measures have gradual effects, creating the conditions for further de-escalation.

Specifically, the minister stated: “For the first time, the prices of products in supermarkets in May are reduced (-1.25%) compared to the corresponding month last year, while also for the first time 14 of the 23 product categories recorded a decrease.

The battle for interception accuracy is ongoing. This is precisely why the trend of falling prices in supermarkets, as recorded in the IELKA survey, proves that the measures are having gradual effects, creating the conditions for further de-escalation.

Greece has taken the most and most drastic measures of any other European country and these are beginning to bear fruit despite the negative and sterile criticism of the opposition. But we are interested in the benefit of consumers and their families. That’s why we don’t stop, we keep going. With measures that address the root of the problem and will have a lasting effect.”

It is recalled that according to the European Statistical Service (Eurostat), inflation in our country recorded a particularly noticeable drop from 3.2% in April to 2.3% in May, with the result that Greece has the 6th lowest inflation in the Eurozone, in which harmonized inflation – contrary to Greece – rose from 2.4% in April to 2.6% in May.

Food inflation, which directly affects households, also recorded a fall. As estimated by the European Statistical Service, in Greece it decreases from 4.8% to 2.4%, the lowest level of the last three years, from July 2021.

In a statement from the Ministry of Development, it is emphasized that the specific performances recorded by Eurostat are the result of the interventions made by the Greek government and proof of their effectiveness and it is added that: “With a series of measures of a structural and control nature – which no other country in the Europe – the consequences of accuracy are limited as much as possible. A problem that is not only Greek, but has European dimensions”.

What did the IELKA investigation show?

Reduced by 1.25% on average on an annual basis, the prices of products in supermarkets are recorded in May 2024, according to research by Consumer Goods Retail Research Institute (IELKA). At the same time, of the 23 categories examined in the research, 14 recorded a decrease and 9 an increase.

In particular, the net decrease in the supermarket chain price index in May 2024 shows that supermarket chain inflation is negative at -1.25% (vs. +1.10% in April, +0.28% in March , +2.70% in February and +3.00% in January 2024). The change in May compared to April is due, according to IELKA, mainly to the continued de-escalation of prices and partly to the effect of seasonality due to Easter, a period during which strong promotional actions are recorded during the Holy Week period, which in 2023 was in mid-April, while in 2024 in the first week of May and is incorporated into the data of this measurement.

Biggest price reductions are recorded in the categories: butter and eggs (-7.50%), stationery, cosmetics and personal hygiene items (-5.62%), fresh fruit and vegetables (-4.04%), cheese (-3, 97%), alcoholic beverages (-3.74%). In dairy, the decreases recorded are the result of both the post-pandemic market normalization and the reduction in producer prices for some products, while products such as butter and eggs benefit from Easter promotions. Fresh fruit and vegetables have benefited from comparatively better weather conditions compared to 2023.

Biggest increases are recorded in the categories: cookies, chocolates, confectionery (+5.85%), fresh fish and seafood (+4.42%), ready meals (+3.13%), food and pet supplies (+3, 05%), waters and soft drinks (+2.79%). Most of these items are affected by the international prices of raw materials and especially the prices of sugar and cocoa.

The reasons attributed to the tendency to hold down product prices in supermarkets are:

  • Gradual deflation of inflation. Prices have been stabilizing in recent months in large grocery stores due to the large volumes of products they carry, economies of scale, their organizational/technological readiness and their private label product range.
  • Better compared to 2023 weather conditions in May 2024. Last year’s rains had significantly increased the cost of fresh fruits and vegetables.
  • Offers and discounts and the seasonality of Easter. Offers and discounts in the organized retail channel are more in number, intensity and percentage discount, which affects the final prices of the products. Many of the Easter offers were implemented in 2024 in May and 2023 in April, which artificially led to higher prices in April, but also significantly lower prices in May.
  • Government institutional interventions. Supermarket chains operate in a strict institutional framework (e.g. Prohibition of promotions in case of price increases 6969/2024).
  • The de-escalation of the prices of raw materials in the previous months in the international markets and the normalization of the market. International indices of food raw materials (e.g. FAO Food Price Index) record a decrease in the first months of 2024.
  • High stock turnover rate. Price containment occurs much faster in large outlets due to higher inventory turnover. In other words, they move their stock faster and make new purchases to replenish stocks more quickly.
  • Impact of private label products. Sales shares of private label products are larger in large supermarket chains due to a wider range of code.