Grocery price inflation slows sharply

 

The proportionate cost of on an everyday basket of groceries in Latvia is one of the highest in the European Union according to 2018 Eurostat figures. Groceries and soft drinks make up 18% of monthly household costs, which is the fourth-highest figure among European Union countries. In comparison, Irish households spend 9.1% of their monthly budget on groceries.

“Food takes almost a fifth of typical monthly expenditure for Latvian households, compared to just 12 percent of the EU-wide average spent on groceries and non-alcoholic drinks. By consistently focussing on price reduction initiatives, Maxima has contributed to a slow-down of food inflation throughout Latvia. Within six months, the prices of products in categories such as milk and dairy, bread and cereals, and vegetables and fruit, which are on the regular shopping lists of almost all consumers, have decreased by up to 15 percent,” says Maxima Latvija Board Member Jānis Vanags.

In August of this year, one of the most rapid decreases in price was for fruit and vegetables; the prices of vegetables decreased by -15.5% in Maxima Latvija stores, almost 5% lower than across Latvian grocery retail overall. Meanwhile, prices for fruit in Maxima stores dropped -3.6%, as opposed to in the market in general fruit prices have increased by 4.1%. One of the most rapid price decreases in Maxima stores in August was for coffee and tea by -7.3%, which is 5.5% lower than in retail in general.

On average over the previous six months, groceries of various product groups in Maxima stores have been significantly cheaper than elsewhere in grocery retail outlets. The prices for milk, cheese and eggs, for example, were consistently - 2.4% lower; fruit prices were -1.8% lower; and the prices of mineral waters and soft drinks were -2.8% lower than the national average.

At the beginning of this year, Maxima Latvija reduced its regular prices on almost 1,000 important everyday products preferred by consumers. Before reducing prices, thorough analytical work was undertaken in order to identify the product categories and product groups which have everyday importance for consumers and are most often placed in their shopping baskets, including mineral water. The regular prices of almost 1,000 products were lowered by up to -40%.