Retail shop prices rose by an average of 19.9% y-o-y in May this year, were 20.4% higher in April than a year earlier and 23.7% higher y-o-y in March, according to a report by UCE Research and WSB Merito University.
Analysis of over 80,000 retail prices from over 39,000 shops showed that fat products saw a 3.9% y/y decrease in May this year, while the highest y/y price increases were for vegetables, up 39.9%, household chemicals, up 32.6%, pet food, up 31.9%, food supplements, up 25.5%, and children’s items, up 24.6%. In contrast, the smallest y-o-y increases were for meat – up 10.7%, dry goods – up 11.9%, as well as fruit – up 11.7%.
The prices of food and non-alcoholic beverages (13 categories in total) went up by an average of 18.4% y-o-y in May (19.1% in April and 23.2% y-o-y in March). One can see the difference between these products and all the rest, including baby items, pet food, household chemicals and personal care products.
“The main reason for the lower growth rate in beverage and food prices is the weaker-than-forecast decline in production costs. This trend will stay with us for longer due to the stabilisation of global markets in all energy carriers. Furthermore, in the current spring period, increased agricultural production is strongly influencing the fall in food prices,” Dr Hubert Gąsiński of WSB Merito Warsaw University commented, as quoted in the release.
Analysts from UCE Research pointed out that, for the first time in many months, not all observed categories became more expensive. In May, fat products broke out of this pattern. In contrast, 16 other product groups recorded double-digit increases, ranging from 10.7% to 40.9% year-on-year. In April, increases in 17 categories ranged from 8.5% to 48.8% y/y. In March, increases ranged from 11.3% to 46.4% y/y.
“The fall in prices in the fat products segment may have a basis in unprecedented imports of sunflower seeds and rapeseed from Ukraine in previous years. The EU restrictions on the marketing of the above products, which are being introduced unhurriedly, will no longer cause significant increases in the Polish market. Other product groups are under the influence of the wage-cost spiral. The deceleration of price growth will not occur any sooner than in Q4 of this year or in Q1 of 2024. A potential reduction in interest rates and a return of optimism among Polish manufacturers may have a nonnegligible impact on a further decline in prices,” Gąsiński assessed.
Dr Agnieszka Gawlik of the WSB Merito Opole University indicated that further declines in shop price dynamics could be expected, provided the international market situation does not change and there are no unforeseen supply shocks. In Poland, the potential decline in price growth may be tempered by the infusion of money into household budgets ahead of this year’s elections.
The survey covered all the discount stores, hypermarkets, supermarkets, convenience and cash&carry chains on the market, which reach the majority of consumers in Poland with their offer.
Source: UCE Research and ISBnews
