You’ve been spending a lot more at the checkout for your groceries for almost two years now. At the beginning of this year, it was even more than 18 percent more than a year earlier.
Those times were happy, says Rini Emonds, consultant at market research agency Circana. Edmonds is engaged in retail sales.
Few products cheaper
In November this year there were even products whose price lager compared to a year earlier. For example, fresh semi-skimmed and skimmed milk was 11 percent cheaper, margarine 3.7 percent and frozen vegetables 1.6 percent.
But on average you were still in favor of foodstuffs in that month Lost 6.3 percent more.
‘Prices don’t fall often’
Experts do not expect the much lower prices that we were used to until a few years ago to return.
It almost never happens that the amount at the bottom of the supermarket receipt decreases, says Nadia Menkveld, agricultural and food economist at ABN Amro.
Wages will not go down, and therefore neither will the wage costs of supermarkets, she says. Ultimately, they have to include their costs in the price tags.
‘Price of 55 products remained the same’
Experts differ on what we can expect at the box office next year, but some are (a little) optimistic.
“For a basket of 55 products that many consumers often buy, prices are now 8 percent higher than a year ago and even 30 percent higher than two years ago,” says Norman Buysse of market research agency GfK. Since January they have remained about the same, but still at a high level.
‘Prices may drop slightly’
Next year will be the average prices in the supermarket may drop slightly, but it won’t be much, Buysse thinks. He does not want to mention a percentage.
Previously, the prices of energy and raw materials rose, which significantly pushed up supermarket prices, he says. “Now that effect is disappearing.”
But wages are still rising. That’s how the minimum wage works upwards from January 1st. It will have an effect on the costs of supermarkets, because many employees, such as shelf stackers, earn that minimum wage or slightly above.
‘Sugar and cocoa through the roof’
Menkveld is more cautious about supermarket prices in 2024. For a number of raw materials, such as wheat in dairy, the price has fallen. But the price of sugar in cacao has just gone through the roof, she says. She also points to the higher labor costs.
She thinks that the recent price increases will be behind us next year, but also expects prices to remain at a high level. “Some products are now falling in price, but on the other hand, many costs are not falling, such as the mentioned wage costs.”
Labour costs
Labor costs are a major expense for supermarkets and almost make up for it 10 percent of the total turnover.
“50 to 60 percent of every euro in turnover consists of purchasing costs. Of the remaining 40 percent, transport and wages must be paid, among other things,” says Emonds. Wages account for about a quarter of this and therefore weigh heavily.
Not only will wages for supermarket staff rise next year, wages will also increase in the food industry. There are wage increases of 7.77 percent agreed to meet.
That is high compared to other sectors that work at higher wages weather throughout the chain, says Menkveld.
Meat prices under pressure
The price of meat is under pressure, says the economist. The prices of livestock feed have increased in recent months decreasedbut are still at a relatively high level.
In addition, the livestock population is shrinking in the Netherlands and many other Western European countries. As a result, meat prices in the supermarket remain relatively high, according to Menkveld.
Moreover, supermarkets almost only sell chicken meat with a quality mark. That means better animal welfare, but the costs are higher, says the economist. “That effect doesn’t go away.”
“And because of nitrogen, a permit for stables is more difficult to obtain, which is why fewer chickens are kept. In principle, this has a driving effect on the price.”
The consumption of meat does decreasebut meat continues to take up an important part of the shopping basket, according to Menkveld.
‘Prices 2 to 3 percent higher’
Emonds thinks, unlike Buysse and Menkveld, that a cart of groceries will be a bit more expensive next year. “Before corona, prices rose on average 2 to 3 percent per year and you can also assume that for 2024,” he says.
Purchasing prices for supermarkets may drop somewhat, which varies per product, but because they spend more on labor costs, they have to increase consumer prices across the board, according to Emonds.
“Supermarkets have recently increased their prices less than their costs have increased, so they have lost some profit, but they do not want to continue doing so.”
Uncertain factors
Incidentally, unexpected events, such as the Russian invasion of Ukraine in 2022, can always influence expectations for prices in the supermarket, says Menkveld. In 2024, the geopolitical situation will remain a very uncertain factor.
This could also be the weather. Drought or a lot of rain can affect the harvest and cause price fluctuations.
“In any case, climate change is causing more extreme weather conditions in the Netherlands and the rest of the world. In general, this is negative for harvests: a smaller harvest means a higher price.”
2023-12-13 05:26:10
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