Lorraine Williamson
Spain’s food manufacturers have slashed prices at a pace not seen in over a decade – yet supermarket shelves tell a different story. Despite the steepest producer price drop since 2014, households are still paying nearly as much, and in some cases more, for their weekly shop.
According to Spain’s Industrial Price Index (IPRI), food industry prices to retailers fell year-on-year by 2.2% in April, 2.7% in May and 3.3% in June. No other year since 2014 has seen such consistent monthly declines. In contrast, the rest of Spanish industry recorded a modest rise of 0.8%, fuelled mainly by higher energy costs.
But falling factory prices do not automatically translate into lower supermarket bills. The National Statistics Institute (INE) reports that food and non-alcoholic beverage inflation in June still rose by 2.8% compared to 2024, with increases driven by meat, fish and seafood. Vegetables and legumes edged down, but not enough to offset the broader trend.
Olive oil bucks the trend
One of Spain’s most closely watched products has seen a dramatic reversal. After soaring to record highs in 2023 and early 2024 due to drought and poor harvests, olive oil prices have plunged by almost half since April last year. A litre now costs what it did more than two years ago – offering rare relief in the grocery aisle.
Private labels reshape the market
While olive oil eases, the broader retail battle is intensifying. Supermarket own brands surged from 27.2% market share in 2024 to 43.7%, according to Kantar Worldpanel. Nearly every household now buys private label goods, and four in five rate their quality as equal to or better than branded products. Among under-35s, that figure rises to 42% who say own brands are better or much better.
The shift is giving supermarkets unprecedented leverage over suppliers. Producers who refuse to cut prices risk being delisted entirely. Industry profitability has slipped to 6.81% this year – one point lower than in 2024 – though still above pre-crisis averages, according to the Centre for Business Margins.
A European trend – but faster in Spain
The private label boom is happening across Europe, but Spain’s pace is striking. Analysts predict own brands could command 60% of the market within a decade, making Spain the continent’s leader. Juan Manuel Morales, president of Eurocommerce, has warned manufacturers to act now: narrow the price gap, innovate, and promote – or risk disappearing from the shelves altogether.
Checkout reality
Spanish households spent an average of €5,391 on food and non-alcoholic drinks last year, about €450 per month and 15.8% of household budgets. Early 2025 figures suggest spending is inching higher despite the producer price cuts.
For now, the supply chain squeeze is landing hardest on manufacturers. Shoppers are yet to see the promised relief at the till – and unless retailers pass on the savings, “lower prices” will remain a story told at the factory gate, not at the checkout.
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