Price rally: Bleak forecasts for July – August

There is no end to raging price hikes. Prices of food and consumer staples are rising steadily, while new wholesale price lists with average increases of 11.5% hitting supermarket shelves portend another rise in inflation this month as well.

Prices of food and household items have climbed as much as 40% in the past four months as real consumption fell sharply, with households cutting back not just on clothing and footwear, home appliances and fuel, but also on inelastic demand items, such as food products (dairy, meat, cheese, etc.).

Sales fall by 9%

Already, according to market players, in terms of sales volume, the decrease reaches 9% in the first half of this year compared to the corresponding period of 2021. From the beginning of March until today, a typical supermarket “basket” consisting of 25 products has increased in price by 10.5% based on data collected by the Ministry of Development and Investments and displayed on the e-Consumer digital platform.

It is recalled that there has already been a huge increase of 48.8% in the general index of producer prices in industry (total domestic and foreign market) in April this year compared to the corresponding index in April 2021, against a 14.6% increase in the corresponding comparison of indicators in 2021 with 2020, visible on shelves two to three months later.

A new wave of price increases is expected soon in non-alcoholic beverages, poultry products, meat, dairy, oils, fruit and vegetables, snacks, soon, while basic consumer products other than food, like household cleaners, personal care items and stationery are also expected to see price hikes.

The biggest mark-ups

The biggest price increases are in chicken with the increase in the average price on June 30 compared to March 1 reaching 41%. It is worth noting, however, that two days later (Saturday, July 2) the average price of chicken per kilo had returned to normal, i.e. at 3.73 euros.

The products that are directly affected by the war in Ukraine follow, namely flour and sunflower oil. Specifically, the price for a kilo of branded flour on June 30 had reached 1.7 euros, increased by 33% compared to March 1. The increase recorded by sunflower oil during the same period amounted to 29.3%. At the same time, apples show a 26% increase (obviously due to the season), while eggs show a 24% increase. The increase in corn oil reached 20%, feta cheese 13.1%, sandwich bread 10.2%, yogurt 7.5%, potatoes 6.9%, olive oil 6.1% and bananas 5 .5%.

The battle for a spot in the basket

With inflation reaching 12% in June from 10.5% in May, branded and generic products are slugging it out for a place in the consumer’s basket.

Households are turning to private label products despite the fact that their prices are rising faster than those of branded products, but they still remain cheaper. The main categories with private label sales growth are still food (legumes, pasta, etc.) and household care products (kitchen paper, cleaning products, etc.).

Given that the national Consumer Price Index that statistical authority ELSTAT will announce on Friday, July 8, will in all probability approach 13%, the makeup of the household basket will not change.