Record high food prices in Hungary: discount chains are the winners of the situation

By: Trademagazin Date: 2024. 12. 18. 12:10

In recent months, food prices in Hungary have been rising steadily, which is also blatant at the European Union level. In some product areas, price increases of 30-50% were experienced, and in other cases, purchase prices increased by over 10%. According to György Raskó, an expert interviewed by Agrárszektor, the winners of the situation are discount chains, while other market players are operating at a loss.

Food inflation has been increasing continuously since September, and by December – in annual comparison – it may reach a level of 4%, which exceeds average inflation. According to György Raskó, the increase in food prices has primarily affected products such as eggs, the purchase price of which has increased by 30-50%, and milk and dairy products, the price of which has increased by 10%.

The market dominance of discount chains is becoming increasingly strong. However, the strategy behind lower prices forces traditional grocery stores to operate at a loss, while discounters generate significant profits. Currently, 90% of Hungarian retail stores are loss-making, as they have to adapt to the prices dictated by discount chains.

György Raskó pointed out that some Hungarian consumers try to buy products on sale by looking at the magazines of department stores. This method is time-consuming and not feasible for everyone due to travel costs.

The average increase in food prices at the European level is around 2.5%, which consumers hardly feel. In Hungary, however, inflation and the increase in food prices can already be more than 100% in certain product areas. Incomes, whether wages or pensions, cannot keep up with this increase, so an average of 30% of Hungarian households’ monthly expenses go to food.