Spaniards may be buying less in supermarkets, but they are ending up spending 6.8% more on the shopping basket as a result of price rises.
Ignacio García Magarzo, chief executive of the supermarket employers’ organisation Asedas, pointed out that Spanish distribution companies are seeing consumers ‘starting to show crisis behaviour’ caused by rising prices.
In response to questions from journalists, the top executive of Asedas – which brings together brands such as Mercadona, DIA, Lidl and regional chains – pointed to the effect of the rise in prices in the shopping basket. According to the latest official data, the increase in food prices is even more than 10%.
We are dealing with an extremely complex scenario. The supermarkets have shown ‘responsible’ behaviour, as they have ‘contained the increase in these prices for months by adjusting their margins, as always happens in crisis situations’, he said.
All channels and operators affected
The reality, which ‘affects all channels and operators equally’, also means fighting not to lose customers. This in a market with ‘enormous competition’ where it is ‘very easy’ to replace one brand with another.
According to Magarzo, ‘the companies are doing their best to regain some of the trust that they may be losing because of the prices’. But ‘consumers are behaving like they are in a consumer crisis’. Therefore, this translates into lower spending, with more frequent purchases and ultimately a lower bill.
Calls for lower taxes
‘Inflation is taking us back to a scenario similar to that of 2008. However, we hope that we don’t face decline in consumption as we saw then,’ he also said. On behalf of Asedas, he urged the government to address this situation together. For example, by reducing taxes on consumer goods.
Rise of online?
Looking at the purchase channels, shopping in physical shops still proves popular. According to the latest figures, six out of ten Spaniards shop in physical shops. This is compared to the 6% who only shop online. Furthermore, 33% of consumers buy both physically and online. However, omnichannel shopping is expected to continue to grow. Especially since more and more Spaniards discovered online shopping during the pandemic. However, inflation puts us back in a scenario similar to 2008. But we hope that consumption will not fall as it did then.
Also read: Increase in online shopping
However, García Magarzo pointed out that e-commerce has to be sustainable, also economically, and that the extra costs of home delivery ‘make profitability difficult’. As an example, he pointed out that there are now ‘companies that boast that they are not losing money with online trading’.
Also read: Shopping basket now more expensive in Spain