According to data sent by statistics on Thursday, food costs take more than 350 lei out of our pockets compared to a year ago, and this in conditions where people buy less and turn to private brands, which are cheaper.

Household consumption increased in the first two months (compared to the first two months of 2022) by 3.8%, and consumption of food, beverages and tobacco – by almost 6%. Compared to January, the growth in February was only 1.5%.

The accelerated rate of growth in food prices in recent months has come as a shock to people who have seen their share of spending on groceries rise sharply.

According to the statistics, people have reduced spending on personal care (from 5.3% of income to 5%), walks, furniture and home equipment, as well as on drinks and tobacco as a supplement to food.

It will be recalled that in February food inflation was more than 22%, and retailers are trying to adapt to new levels of food purchases.

Retailers say most shoppers are feeling the pinch and trying to save where they can.

Why are products more expensive? For 4 reasons

Imports. Romania produces little, and we import a lot to ensure consumption. From pork neck to butter, milk and honey. Imports often come from countries where inflation is higher than here. In other words, we are importing inflation.

The other 3 reasons relate to the increase in the price of feed, transport and fertilizers.

The biggest costs along the food chain are feed, transport and fertilizers. The increase in prices for these goods is felt first by manufacturers, then by processors, and finally by retailers and their customers.

“If you look at milk, farmers started to see feed prices rise as early as late 2021. This growth accelerated in 2022 with the war in Ukraine,” explains one of the processors.

Chicken and pig producers also say they have been hit by rising feed prices, which account for up to 70% of the cost of raising chickens and pigs.

Energy, which used to be an almost negligible cost to the food industry, is now a major cost obstacle.

And the last, but not least, problem of the food industry is the need for labor. And more expensive hiring and salary increases are also visible in the mat of the final product.

Shoppers are turning to private labels to save more money, but the profitability of the companies that make these products is low.

About three-quarters of those surveyed by the specialized company say that they are worried about the rise in prices for consumer goods. It can be said that this is a phenomenon that characterizes the masses, and therefore the behavior dictated by this perception will be constantly observed in the business of manufacturers and retailers, writes Revista Progresiv.

“In studying how urban Romanians plan to manage these expenses, we get two certain pieces of information. The first is that almost all categories will experience reductions in either volume, value, or both. Second, the reaction method differs according to necessity. Three groups of behaviors and, by default, three groups of categories appear. Core categories are the ones that Romanians are most resistant to change, they are the categories that are repeated in their daily life and to which they have a high emotional attachment not only to the category but also to the brands they choose. This includes baked goods, fruits and vegetables, as well as dairy products and personal care products. For them, reducing quantity is not an option, and finding lower prices may be an approach they view with caution.

“Thus, we can conclude that they are more likely to switch to their regular brands that offer value for money options than to switch brands they like. It’s worth noting, however, that from June to December 2022, the six months during which talk of inflation has intensified, there are consumers who are becoming more open to more deliberate dairy consumption and personal hygiene, thinking they might be cutting back on one thing at once, an aspect that manufacturers of these categories should take into account”, – emphasizes the representative of the sociological company