After a period of more than a year of steadily rising prices for food and other basic goods, there are now strong indications that in 2024 the price increases will taper off. Just an hour before the announcement of the slowdown in price growth in the Eurozone and Greece, market people from the podium of the Institute for Retail and Consumer Goods Research (IELKA) conference confirmed that this trend is expected to continue in the coming period.
All the speakers agreed that the inflation of products in supermarkets is not a Greek phenomenon, as it is persistent and constant almost all over the world and is due to both geopolitical developments and the climate crisis, especially with regard to food. Significantly, according to the NielsenIQ global survey, consumers say they are paying an extra 18% today compared to 2021 for consumer goods purchases. The interesting thing about the global market as well is that most of the increase (+13%) is for this year.
In his statement, NielsenIQ Hellas CEO Vaios Demoragas noted that sectoral inflation lagged the path of broader inflation by six months and made its presence felt in the middle of the second quarter of 2022 and was the driver of supermarket sales growth for a long period of time up to the first half of this year.
This situation has begun to change in recent months, with July seeing the first time in a long time that there has been a single-digit increase in product prices - compared to double-digit growth until then - a slowdown that has continued at a more pronounced pace until October where data is available. The encouraging aspect is that since July, aided by tourism, consumption in volume terms has increased, so that the fall in consumption up to October is at the level of 0.7% and estimates suggest marginal differences compared to last year for the year as a whole.
According to Mr Demoranga, a significant contribution to the moderation of prices and sectoral inflation was made by the significant increase in the share in the mix of private label products. The latter is confirmed by Circana's research which was presented yesterday at the IELKA conference. Specifically, branded products fell from a 76.4% share at the end of 2021 to 73.8% in October 2023 at the same time as private label products increased their share from 23.6% to 26.2% last month.
As Circana Sales Director Dimitra Katsipi told the event, the outlook for 2024 is positive as "next year will also be inflationary but without the same momentum". Specifically, the 2024 market as a whole is expected to move at 4.5% compared to 7.3% this year, while according to the company's estimates for the food sector, food price increases are expected at 4.6% compared to 7.2% this year.
Finally, in terms of products in the Health & Beauty category, price increases of 4% are expected in 2024 (up from 7.2% this year) and in home products price increases of 5.7% are expected from 9.2% this year.