It might seem that the prices of everything will only go up. It is particularly sensitive in the case of food, where since the beginning of this year we have not felt any relief and, on the contrary, it seems that shops are getting more expensive almost every week. For some items, price increases are already in the higher tens of percent.
Marketers have gone overboard
However, there are voices that it is the traders who have increased the prices too much. The food manufacturers themselves also increased their prices, but not nearly as much. However, the stores took advantage of the situation where there is constant talk of price increases, and basically fulfilled these expectations. They now have record margins on some products. Unfortunately, customers are also paying record prices.
Fortunately, there is a competitive environment here. While the adage used to be that if everyone’s raising prices, why shouldn’t we raise prices too, now it seems we’ve hit an imaginary ceiling where people are starting to curtail their demand because they simply don’t have enough money anymore. On the contrary, they are looking for alternatives where they can buy cheaper.
The beautiful thing about the market environment is that if it’s even remotely possible, they will eventually get it. Some of the traders will simply go broke and lower the prices. Žabka became one of the first. It is an extensive network of smaller shops that mainly serve various housing estates and that have a very local and loyal clientele.
Others may follow
It was Žabka that decided to reduce the prices of more than 200 items that people buy most often. This is mainly about basic necessities, such as dairy products, pastries, drinks, sweets, sausages, etc.
Now, after three months, the company has evaluated the entire event and found that this step clearly paid off and will continue with this pricing policy. It turned out that sales on discounted items increased by an average of 31%, which is a really impressive increase for a retailer that has an established clientele. If someone buys all his needs in this store, he can save several thousand crowns a month.
After this experience, it is possible that other stores will follow a similar path. After all, you can already see that they are trying to attract customers. For the time being, however, they keep the standard prices high, but they are increasingly attracting really big deals that reach up to 60%.
Although we probably won’t get to the price levels we were used to last year, at least some relief could come as things stabilize.
Foto: Shutterstock
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