Despite falling energy prices, inflation in our country rose again in February. The slight increase from 7.6 percent in January to 8 percent in February is mainly due to rising food prices. But will we pay less at checkout again?
First of all, gas prices seem to be heading in the right direction. But this will not immediately lead to cheaper products on the shelves. Koen de Jong explains that many other factors also play a role. He is the director of International Private Label Consult, a consultancy for manufacturers and retailers.
De Jong has never experienced such a high price increase in his career. “Unprecedented, I’ve never seen it in the last 30 years.” He believes this one-off price increase is partly due to supply chain issues caused by the coronavirus pandemic. Then came the war that had a huge impact in Ukraine.”
delay
Prices of some goods, such as cereals and milk, have dropped a bit, but we don’t notice it in the supermarket. “There is a delay because it will take some time to come into effect after the negotiations between the parties are complete. Also, the price of milk depends on factors such as weather, competition, supply and demand,” says FrieslandCampina. “And it’s not the price on the shelf that matters to us, it’s the prices ultimately set by retail.”
Vegetable processors HAK and Unilever have to contend with energy prices as well as other factors such as labor costs. Unilever then assumes that consumers won’t see lower inflation on store shelves anytime soon this year.
De Jong also sees that some commodities still have prices. “Sugar, eggs and butter, for example, continue to be expensive.” If there is a decrease, write it already. “It takes months to see the impact,” said CBS chief economist Peter Hein van Mulligen.
discount
The good news is that inflation may eventually drop to lower levels. However, falling inflation does not mean that products are getting cheaper. Because life becomes really cheap only when inflation drops below zero percent and thus becomes negative. And this happens very rarely. “We don’t have to worry about prices for now,” he said.
Will there be a price drop? Van Mulligen: “The price of fresh produce like fruit is already going to rise and fall more often. Things like coffee also become more expensive when the harvest is bad.” So it doesn’t look like prices will really drop. “It is true that prices usually stabilize after a while.”
What can you do as a consumer to pay less at the supermarket? De Jong points out that you can opt for a private label, for example. “A brands are extremely expensive, the distance to private brands has increased. Cheaper supermarkets are also an option, they have excellent products at a low price. Prices rise like rockets but fall like parachutes. No one is happy with the increases, but that is the reality.”
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
