“We have raised prices a lot, but not doing so would have been a disaster for the production chain.” With these controversial words, the president of Mercadona tried to explain, during the presentation of results last March, that his company had been forced to pass on part of the sharp increase in costs to final prices. In the midst of the shopping basket crisis, with the Government pressuring supermarket chains to help reduce inflation at the cost of cutting their profit margins, Juan Roig’s statements added fuel to the fire of the national debate.
Although in the same press conference, the Valencian businessman assured that, in parallel, the chain had lowered the prices of 200 products and that they were going to continue pursuing the reduction of costs to lower the prices of sale to the public. Barely a month later, Mercadona has announced an adjustment in the prices of 500 daily consumer products until the end of the year that will mean, according to their calculations, a saving of 150 euros per year in the shopping cart. Although the company does not provide a list of the affected products or in what proportion prices will be lowered. And in any case, we will have to wait to verify the effect, since Roig himself acknowledged that the general price increase in 2022 was 10%.
In any case, with this movement, unusual in a company that has traditionally followed a policy of “always low prices” unrelated to this type of specific strategies, Mercadona is fueling the price war between supermarkets at a time when the main operators in the sector are focusing all their efforts towards the objective of maintaining market share, retaining their customers by constantly offering attractive discounts and promotions.
The battle between the supers has been raging for months. According to a study carried out by the consultant Kantar for the Ministry of Agriculture, Fisheries and Food, since the beginning of the year a higher percentage of promotional purchases has been detected, as well as a firm commitment to private labels by distributors to maintain their market share. market. This same Tuesday, the Dia supermarket chain estimated the increase in its investment in promotions at 15%, reaching 150 million euros, to support family savings.
And although an agreement with the Government to market an anti-inflation basket, as in France, has proved unfeasible, some chains have launched to offer their own cheap baskets, such as Eroski, which announced last March the offer of 1,000 basic products at reduced prices. Carrefour did it before, at the end of last year, when it launched a basket of 30 daily consumer products for 30 euros, promoted by the initiative of the second vice president, Yolanda Díaz.
The promotional effort that Mercadona is now making seeks, as explained by the company, to anticipate the drop in costs that “slowly” is already taking place in the market. Indeed, from the Government they have been defending for weeks that food prices have already peaked and begun the downward path after verifying a reduction in production costs that should begin to be transferred to final prices in supermarkets.
Precisely, the Government has given a change of direction in recent days to direct the pressure towards the countryside, raising the focus of the supermarkets. The economic vice president, Nadia Calviño, has urged farmers and ranchers to transfer the reduction in energy costs and the public aid received to the following links in the chain so that this translates into lower final food prices on the shelves from supermarkets. In parallel, she has just announced the launch of an “observatory of business margins” to guarantee transparency, competition and the adequate distribution of income.
In the last meeting with representatives of the food chain, Agriculture agreed to set up several working groups to monitor the costs ‘from the field to the table’ of some foods. Specifically, the reports on the value chain of extra virgin olive oil and packaged liquid milk will be updated, and specific reports will be prepared for peaches, nectarines, potatoes, tomatoes, citrus fruits and honey. These are descriptive studies of the set of costs involved in each marketing stage that a food goes through from its harvest in the field to the table and are key to understanding the pricing process and promoting transparency in the publication of prices. the costs.
According to the criteria of The Trust Project
