Consumers can expect more food price increases in the near future. Producers regularly want to raise prices by more than 10 percent, he said, and supermarkets have little choice but to pass it on to consumers, the supermarket director said. Het Financieele Dagblad.
“In many product categories, we have received proposals for double-digit price increases,” Vomar director Aart van Haren told the paper, confirmed by other supermarket directors.
Negotiations between supermarkets and producers are already difficult, made even more difficult by the proposed 10-20% price hike, Rabobank retail economist Sebastiaan Schreijen told FD. The negotiations have already emptied supermarket shelves. For example, Albert Hein temporarily had no Nestlé products. And those price increases were much lower than they are now.
“Supermarkets have tried to soften price increases for customers, partly at the expense of their own margins,” said Schreijen. But they can’t keep it up. “So if suppliers get their way, supermarkets have to give the majority to consumers.” This carries the risk of consumers cutting back on food. But supermarkets can’t make a very strong case either, as producers may withdraw, leaving their shelves empty.
Food producers say they need to raise prices as costs have skyrocketed in recent months. Energy prices are much higher, and diesel prices are higher, so are transportation costs. Food prices have already increased significantly this year. According to the Dutch Statistics Office, in September he was 21.7% more than he was a year ago. And then there’s more hiking. Heineken and Unilever announced new price increases last week.
Picnic director Joris Beckers told FD that he understands price increases due to rising costs of energy and raw materials. But he believes food producers are lining up their wallets, too. “They proudly state in their quarterly numbers that they have been able to raise prices by about 10%. To what extent is it socially responsible?”
A director at Vomar has similar suspicions, telling FD that big-name producers are using negotiations to boost their profit margins. “They are more reluctant to explain the rationale for price increases than their own brand labels and fresh produce producers,” Mr Van Haren said.
FNLI, the governing body for the Dutch food sector, told FD it could not comment on the price hike negotiations because its members were not allowed to talk to each other for competitive purposes. “Negotiations are a matter for the supermarkets and the suppliers themselves.”
https://nltimes.nl/2022/11/01/supermarkets-hike-prices-even Supermarkets may raise prices further