Mercadona Slashes Prices On More Than 500 Staple Food Items Until End Of Year

Spain's leading supermarket chain, Mercadona, has announced that it will lower the prices of at least 500 basic food products starting this month until the end of the year, in a move aimed at easing the cost-of-living crisis currently being experienced by many households in the country.

The decision comes after the Spanish government sought concessions from retailers, following a steep rise in food prices that have hit consumers hard.

Mercadona's President and majority owner, Juan Roig, had recently admitted that his company had been forced to raise prices "by a huge amount" to maintain margins through the food production chain. However, after seeing that input costs were slowly easing, the company decided to make price cuts that it expects will save customers an average of 150 euros this year. The initiative is estimated to cost Mercadona around €200 million.

The cheaper products include a wide range of items such as fresh fish, some cheeses and yoghurts, dried fruit, oil and household cleaning products, among others. In addition, Mercadona plans to take advantage of market opportunities to lower the price of fresh produce. The company says that the price drop will be carried out "without affecting the quality of the products and guaranteeing the sustainability of the entire food chain (suppliers, production sector, company and workers)".

Many of the products that will be cheaper will have a yellow identifying label that specifies the price drop. The company is also keen to stress that the discounts are not a temporary measure, nor are they a "shopping basket" of products with fixed prices like those of French supermarkets, but are permanent reductions.

The move by Mercadona follows similar initiatives by other retailers in Spain, including Basque Country-based cooperative Eroski, which lowered the prices of basic food products in March, and French supermarket chain Carrefour, which launched a campaign in September offering consumers a basket of 30 basic goods for 30 euros. However, Labour Minister Yolanda Diaz's proposal to seek agreements with supermarkets to help impoverished families continue to eat healthily was met with scepticism from business groups and opposition politicians who viewed it as an attempt to regulate prices.

Food prices have been climbing sharply throughout the European Union, with Spain registering a 16.6% year-on-year increase in February. Experts believe that food inflation has yet to peak, and so Mercadona's move will likely be welcomed by many households struggling with the rising cost of living.

Sources

https://www.reuters.com/business/retail-consumer/spains-leading-food-retailer-cut-prices-500-basic-products-2023-04-12/
https://www.surinenglish.com/spain/mercadona-lowers-the-price-500-products-until-20230412123748-nt.html
https://euroweeklynews.com/2023/04/12/spains-largest-supermarket-chain-loweres-its-prices-to-beat-inflation/

Image Credit: Mercadona