Despite the easing of inflation, prices of basic goods are still high, eating away at disposable income. After the meeting held at the end of July by the Minister of Development, Takis Theodorikakos, with market executives, in the context of which he asked both industries and supermarkets to reduce their average profit and, by extension, prices, the Supermarket Association of Greece, sent, according to information from “ET”, a letter to the ministry, proposing some measures that could lead to a reduction in prices.
As he says in “ET” senior Union official, there is a reluctance from both suppliers and supermarkets to permanently reduce prices due to the uncertainty in the market, which is why they are trying to help address the issue by stepping up promotions. “Offers have increased a lot, both in terms of duration and percentage of price reduction, and they apply to almost all products. It is indicative that almost 1/3 of the turnover of the supermarkets, 28%, comes from the offers”, says the same source.
However, because the retail trade also believes that prices should fall and consumer confidence should increase, the Supermarket Association has proposed to the Ministry of Development the reactivation of the measure of a permanent price reduction of at least 5% and for a period of at least five months, with the corresponding information to the public. “We think the measure that ended on June 30 was a good idea and something similar should be built on top of it. By reducing suppliers by 5% or 7% or 10% for six months voluntarily with special marking, the supermarkets could give a better position on the shelf and the ministry in turn inform the consumer public about the companies and the products who participate in the initiative as a reward. It’s a measure to really lower prices, without interventionist measures”, a representative of a large supermarket chain underlines to “ET”.
Profit margin
As far as the profit margin is concerned, the representatives of the organized food retail trade say that they cannot limit it, as the sector already works with a margin of 1.4% and in some cases it can reach 2.5%. However, they point out that some suppliers are working with a 10% and 15% profit margin on some products and they need to review this so that prices can be reduced.
In any case, supermarket executives are against any interventionist measure stressing that they limit competition and bring as an example the ceiling on the profit margin, pointing out that they reduce the competitive functioning of the market. “Because we cannot increase the profit margin, we do not reduce it in some other products”, they say characteristically, repeating that the government should gradually proceed with the removal of the measure in question.
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