The price war divides the ‘super’: not all are willing to lose margins

Chains like Covirán refuse to lower prices so as not to harm their suppliers and manufacturers.

A customer in your supermarket.

The economic crisis is the main reason why supermarkets have settled in a price war, just as the experts predicted. Sometimes more evident with promotions and other times more covertly, Carrefour, Alcampo or Dia try to build consumer loyalty in a pandemic so as not to lose market share.

Carrefour continues with its second unit promotions at 70% and Day, for its part, has also launched offers and promotions on Christmas products.

Some studies already supported this theory at the end of September. 62% of consumers will pay more attention to prices and promotions in the coming months and 66% will control their prices more, according to data from the Association of Manufacturers and Distributors, Aecoc. In fact, they advance that changes are seen in the shopping cart. An example of this is that 34% of buyers will buy more distribution brands.

Division

But not all chains advocate lower prices. “Every time there is a crisis, it usually leads to a price war,” José Francisco Muñoz López, general director of Covirán, acknowledged in an interview with Invertia.

Although the manager points out that “being a cooperative close to local producers, we cannot enter into a price war in which the loser is SMEs, manufacturers… We want to be more efficient, but not at the expense of others”.

And who wins in a price war? Well, the only winner, in terms of savings, is the consumer himself, since the supermarket reduces margins and earns less per product sold. However, the big chains can afford to sell in volume at lower prices.

Price increase?

However, although some companies have become involved in the price war, the Organization of Consumers and Users (OCU) already warned that in recent times there has been a significant rise in the prices of typical Christmas products. Since last December 10, prices have risen by 7.5%, a sharp rise much higher than last year’s, which was 2.3%.

Since last November 25 (the date on which OCU launched its Christmas price observatory, which aims to check the evolution of typical Christmas food products), prices have risen by 9.3%.

“It is a higher increase than the one that occurred in 2019, which was 8.5%. However, despite the increase in prices in recent days, it is the first time since 2015 that the prices of most Christmas products are lower than last year, “says the organization.