Picture - Ethnos newspaper
Greek supermarkets are reducing food prices, but at a rather slow pace. The reason is the economic crisis, or more precisely the fact that many consumers are struggling to buy even essential products.
Data from the Ministry of Development's Observatory of prices are extremely indicative. The last analysis makes it clear that despite the average increase of 0.32 per cent in prices of products from 56 major categories over the last year, there has been a 1.60 per cent decrease in consumption in the first half of 2012.
The recession made supermarket chains begin adjusting their prices according to the negative changes on the labour market after salaries fell by around 23 per cent, cuts in pensions exceeded this rate, and unemployment reached 22 per cent. If we add over-taxation on income with very high taxes to all this, it is clear that in the coming months supermarkets will be forced to make even "bolder" price reductions.
What the data show so far:
- The only product category where there is still a price increase are fresh fruit and vegetables. In particular, in the first half of the year their prices rose by about 6.32 per cent, considering that last year they had fallen by about 11 per cent. Analysts, however, highlight that the prices of fruit and vegetables are highly dependent on climatic conditions and production volume. Furthermore, very recently their prices have been liberalized and it is not excluded that supermarkets will use this fact to account for the losses from price reductions of other goods.
- In the first half of the year, consumption of food products fell by 2.27 per cent, whereas last year the prices of this category had increased by about 1.64 per cent.
- The prices of goods for personal use decreased by 1.37 per cent vs. a 1.87 per cent fall in the period June 2011 - June 2012. Alcoholic beverages are down by 0.07 per cent vs. a 0.39 per cent decrease over the past 12 months, and products for quick consumption - by 0.07 per cent against an overall decline of 0.52 per cent.
- There is an impressive change in soft drinks' prices, which fell in the first half of the year, although last year they had risen. The total drop amounts to 1.77 per cent, despite the jump of 5.79 per cent in the period June 2011 - June 2012. Mineral and table water, juices and soft drinks are down by 1.13 per cent vs. last year's increase of 7.88 per cent. The prices of coffee, cocoa and tea have also fallen by 2.56 per cent, although last year they rose by 3.24 per cent.
- Since the beginning of the year, dairy produce prices have declined by 0.58 per cent. In the period June 2011 - June 2012 they jumped by 1.64 per cent. Oat flakes and their derivatives recorded the largest drop - 2.64 per cent vs. 0.57 per cent last year. Olive oil, butter, margarine and oil, whose prices "jumped" by 0.76 per cent last year, fell by 3.89 per cent in the period from January to June 2012. After they rose to 1.67 per cent, prices of sugar, sweets, chocolates and ice cream fell by 1.32 per cent.
- Compared to these large deviations, prices of meat products have remained almost unchanged. From June 2011 to June 2012, they fell by 0.66 per cent, and since the beginning of the year to date - by 0.58 per cent. Prices of vegetables have also registered a drastic drop - from 0.12 last year to 8.68 per cent during the first six months.
- During the same period, the rest of the products were down by 1.20 per cent, although from June 2011 to June 2012 prices increased slightly by 0.06 per cent. Prices of fresh and frozen fish have followed suit. In the first six months of the year, they fell by 3.52 per cent, and over the past 12 months - by 2.27 per cent.
At the same time, in May, the main index of consumer prices rose by 1.4 per cent compared to the same period last year. Food and soft drinks have increased by 1.75 per cent, which means that supermarkets have reduced the prices of their goods. According to the National Statistical Office's data, in May the price of alcohol rose by 0.42 per cent.
With a 0.9 per cent harmonized index of consumer goods, Greece occupies the 29th place in the European ranking among 32 countries. As representatives of the Ministry of Development note, "lately, Greece is below the average values for the European Union and the euro area, which are 2.6 and 2.4 per cent, respectively. In May, the country was last among the eurozone countries".
According to them this is mostly due to the increase in the rate of VAT on food products from 13 to 23 per cent, the excise duty on heating oil and the international oil prices. They add, however, that "our position compared to the other European countries is improving and this proves that the reforms, "the awakening" of the consumer and reduced consumption are exerting pressure on prices".