Deflation in Food Retail Marks Beginning of 2021

March 11, 2021

The current economic situation in Latvia is challenging, impacting a range of businesses and people. Maxima Latvija has implemented a programme of long-term initiatives making groceries more accessible to customers, increasing purchasing power and slowing inflation. As a result, the company began the first month of the year with deflation of 0.2%, compared with +0.1% in Latvia as a whole. It is important to note that the impact of Maxima’s initiatives on Latvian inflation is slowing price increases not just in its own stores, but for the market as a whole, with general inflation coming close to zero: 0.1%.
“The current priority for Latvia and every household is to improve the economic and financial situation. Although the topic of business viability and public well-being is particularly relevant due to the spread of the COVID-19 virus, this is the company’s fourth consecutive year of implementing a range of price-lowering initiatives to slow inflation in Latvia, making basic necessities more affordable to the people. We are truly pleased to see that our aim of providing high-quality products at low prices is reflected in inflation figures. As a result of our price reductions, deflation for groceries, alcohol and tobacco stood at -0.2%, which is lower than the nationwide figure. 2020 was also good in this sense: over the course of the year, average inflation on groceries, alcohol and tobacco products was 0.3% lower than the nationwide average of 1.7%. Inflation in Maxima stores last January was 1.4% lower than in nationwide, while in January 2019 it was 1% lower (Latvian average: 3.1%; Maxima: 2.1%)”, explains Edvīns Lakstīgala, Director of Procurement at Maxima Latvija.
To ensure that customers are offered the best prices every day, Maxima has reduced prices long-term on several thousand basic necessities. Before reducing prices, Maxima Latvija carefully analysed its products to identify the categories and groups preferred by its customers and are purchased most often both for special occasions and every day.
It has already been reported that Maxima has procured more than 70 million Euro worth of additional Latvian products in order to ensure low prices for customers and long-term growth for local producers. As part of the Sirsnīga Izvēle and Super Cena campaigns, prices were reduced long term by up to 57%. In addition, Maxima and its partner organisations are campaigning for reduced VAT on fresh groceries—fresh meat, fish, dairy and eggs—with a petition on, which has exceeded the number of signatures needed. Furthermore, this initiative will be submitted to parliament this year to encourage tax changes.
Information for the media:                                                                                                                                
Liene Dupate-Ugule
Head of Communications, SIA "Maxima Latvija"
Phone: +371 26425420