Groceries remain expensive. A recent price decrease in supermarket prices seems to have stalled, according to figures from market researcher GfK. Economists expect that prices are stabilizing, AD reports.
GfK buys the same shopping basket with 55 frequently purchased products like apples, toothpaste, minced meat, and milk for months and compares the prices. It buys the groceries in nine different supermarkets to get a complete idea of the price development. After massive price increases, the basket peaked at 132 euros at the beginning of this year. Then there was a slight decrease two months ago. This month, the same basket cost 133 euros. Compared to mid-2022, groceries are 12 percent more expensive, according to GfK.
“Prices remain at a stable high level,” Erik Harmsen of GfK said to AD. Supermarkets are offering discounts where they can. “No supermarket wants to lose customers and certainly not be the most expensive.” But it can’t make up for the price increases.
Some products have become cheaper this year due to falling raw material prices, Nadia Menkveld, an agriculture and food sector economist at ABN Amro, told AD. She mentioned dairy products like butter, yogurt, and milk as examples. “Fresh semi-skimmed milk is 6 percent cheaper than at the beginning of this year. But that is actually only a small decrease because milk is still 25 percent more expensive than two years ago.”
Menkveld expects more small price decreases after the summer, but she thinks it unlikely that prices will return to the level of two years ago. Labor costs, in particular, are higher now. “For many food processors, these have gone up, and they make up about a fifth of the total price.” And some raw materials are getting pricier, like sugar, rice, and olive oil. “This is due to crop failures as a result of more extreme weather conditions. The price of grains also remains uncertain due to Russia’s invasion of Ukraine.”
“Compared to June last year, prices are about 13 percent higher. And compared to two years ago, about 25 to 30 percent higher,” Menkveld said. Supermarket chain Jumbo recently said in its half-year figures that the peak of the rapid price increases is over. That seems to be correct, according to the economist. “But prices are stabilizing rather than decreasing.”