Margin freeze stirs up emotions in the drugstore market

There are several factors behind this: on the one hand, the government’s measure introduced in May, which allows drugstores to make a maximum margin of 15 percent in certain product groups, including body lotions, shampoos and deodorants. On the other hand, the French chain’s own logistical problems, moving warehouses and increased delivery times are also adding to the disruption.

In mid-September, the most popular products were not available in Yves Rocher’s domestic webshop, and the fact that many orders had not arrived for months caused mass outrage in the Facebook customer group. Although the company indicated in a statement that it is planning for the long term in Hungary, disruptions are temporarily inevitable.

The situation is not unique: the effect of the margin freeze can also be felt in Rossmann and DM stores. The former restricted the use of coupon discounts, while the latter reduced the number of hours worked by store employees by 20 percent. Experts say that large chains can still adapt, but smaller market players will be hit harder by the regulation.

László Szabó, co-founder of Growww Digital, believes that the biggest challenge is not the margin freeze, but the continuous decline in purchasing power. At the same time, online retailers are trying to offset the decline with package deals and promotions.