Spanish Food Becomes More Expensive Than The Large European Countries

Spain has gone from having the lowest shopping basket prices among the large European economies to being placed in leading positions. According to the Harmonized Consumer Price Index for Food (IPCA), prepared by Eurostat and which measures the evolution of prices taking into account the purchasing power of citizens on a 100-point basis, the Spanish market has reached a level of 124.13 points.

This represents a growth of almost 14% compared to the 109.63 it marked a year ago, when it was behind almost all the large economies in Europe. The shopping basket has thus become more expensive in Spain not only above the rest of the large European countries but also above the average, which has risen by 12.6%, to 125.2 points.

However, the rise in energy costs, raw materials and transport, among others, have triggered food inflation in Spain, causing distribution prices to now be above countries such as the Netherlands (124.09 ), Denmark (122.9), Portugal (121.4), Belgium (118.99), France (116.88), Italy (116.2) or Greece (115.89) , among others.

Spain is now slightly below Germany, whose ICPA has risen to 120.1, although it is below the European average, which has been set at 125.2 points. Above the European average have been traditionally cheaper countries, but which have now suffered the sharp rise in prices, such as Hungary , with an ICPA of 160.53; Lithuania with 148.3; Bulgaria with 145.82 or Latvia, with 144.1.

Despite the sharp rise in food prices, Spanish food distribution continues to be one of the most competitive in all of Europe. The existence of multiple factors in the business means that it is not a highly profitable market and where the only alternative is to opt for aggressive cost reduction policies to increase market share and margins, something impossible in the midst of this wave of growth of prices.

According to the calculations made by with data from the Mercantile Registry, the average profitability of the main Spanish supermarkets in 2021 was 3.03%. Furthermore, if the distribution margins between 2021 and 2020 are compared, it can be seen that the main Spanish supermarkets have lost profitability, except for Carrefour. In this way, the French chain went from 3.71% in 2020 to 4.6%.

Carrefour, the most profitable
Focusing on the data for 2021, Mercadona closed the year with sales of 27,819 million and a net profit of 680 million euros , which means that it had profit margins of 2.4%.

The Valencian chain is the leader in Spanish distribution with more than 25% of the market, according to the latest data from KantarWorlpannel. However, it failed to outperform Carrefour’s 4.6% return, even though this chain’s sales and profits were lower. Thus, Carrefour closed the previous year with sales of 8,241 million and profits after taxes of 382.7 million euros. On the other hand, Lild obtained a net profit of 150.8 million euros with a turnover of 4,825 million. This is equivalent to a distribution margin of 3.1%. Eroski had a return of 2.05% in 2021 thanks to profits of 105 million euros and a sales volume of 5,116 million.

In the case of the Día supermarket chain during 2021 there is no profitability as a result of its losses, which amounted to 257.3 million euros, which despite everything represents a decrease of 29.3% compared to the previous year. In Alcampo, the latest data published in the Registry is from 2020, when it achieved a net profit of 112 million euros and sales of 3,321 million, which established its profit margin at 3.3%.

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