Spain: The Government to monitor food price increase at the supermarket
After activating the state of alarm, the Spanish government will be vigilant to possible price increase of foodstuffs and other basic products. It could even intervene them, in case they shot up, especially fresh produce’s, which are more sensitive to price change.
For the past few weeks, activity in Spanish supermarkets has exploded. They are one of the few retail businesses that will be able to remain open during these two weeks, which will, in principle, last the state of alarm announced by the Spanish PM. Sales are increasing enormously because many consumers, faced with the prospect of limited movement across the entire country, are stockpiling products to a greater extent than usual.
Therefore the government will be very attentive to possible price increases, sources close to the sector explain, and, in fact, the royal decree of alarm approved last Saturday will allow them to intervene prices to ensure basic products´ supply.
Sources in the sector point out that supermarket sales are becoming more concentrated these days, but "in reality this does not mean that more will be sold, sales have only concentrated". What will happen is a transfer of expenditure from the catering industry to the supermarket, and then to home, something similar as it did in 2008 crisis. "This transfer will have an effect on prices, especially regarding fresh produce, more sensitive to increases".
The prices of fresh produce have already shot up in 2019, a year in which FMCG consumption fell by 0.9%, mainly by packaged food that fell by 1.2% and by increased consumption out of home, according to Kantar WorldPannel. However, companies billed more partly due to fresh produce higher prices, which became 2% more expensive.
Fresh products are more price sensitive than packaged ones. That is why "it is likely that rice or pasta price will not rise, but fruit or vegetables´ will do".
The consumer association OCU has in recent days monitored the prices of the most popular products (toilet paper, rice, pulses) and have noticed only " little changes", "What there will be is a greater demand for fresh produce because the consumption in bars is shifting to households and this can have an impact".
In wholesale markets this change in fruit and vegetable prices can be seen, "there may be prices changes in response to specific demands; and, although those are not retail prices, they will give an idea of what is happening".
Source: El Mundo