The worst is yet to come for German households, according to a report by Allianz Trade
Food prices in German grocery stores will continue to rise and rise another 10% this year, German newspaper Handelsblatt reported on Sunday, citing the latest analysis by international insurance company Allianz Trade.
In monetary terms, it is reported that the increase will amount to €250 per person per year. The latest price increases are attributed to the increase in the costs of energy, raw materials and producer goods.
“High inflation and post-pandemic declines in grocery store sales are putting pressure on grocery retail profitability,” Aurelien Duthoit, sector consultant for Allianz Trade, told the newspaper. “In this sense, price increases are likely to have a significant impact on consumer prices in the near future.”
According to the survey published by the Ifo Institute for Economic Research in Munich, 9 out of 10 food retailers plan to raise prices further due to rising costs for electricity, raw materials and industrial goods.
“The worst is yet to come for homes”, Duthoit cautioned, adding that retail food prices do not reflect actual price increases over the past 18 months.
Last week, the German Farmers’ Association reported that the tense situation on agricultural markets due to the Ukraine crisis is likely to last for months. The critical supply situation is expected to last well into next year and beyond the 2023 harvest, according to Deputy General Secretary Udo Hemmerlin, who expects further price increases for consumers.
Retail prices for dairy products are expected to increase by 20% in the coming months, according to Björn Börgermann, managing director of the Dairy Industry Association.