Reducing the prices of essentials will not be easy, said the CEO of the European retail and wholesale organization EuroCommerce. Crystal Delberg. Conversation with “K”, lists the structural reasons she believes it will take “6 to 12 months” for lower energy costs to be reflected in the consumer price. She believes that the continued rise in prices in the market is not only due to cases of speculation, stressing that in the end, retail trade suffers from reduced consumption. In this context, he speaks of a decrease in business margins, therefore, he considers the price ceiling for products to distort the market. Speaking of Greece, she highlights the small size of the business as a disadvantage.

“Indeed, what we are seeing is a form of delay in the transmission of price changes in the supply chain. Now consumer prices and inflation are slowing down, but instead food prices in the European Union are accelerating to alarming levels of about 15%. This is quite a normal process, as traditionally there is a time lag before cost cuts lead to lower consumer prices. It usually takes 6 to 12 months for prices to equalize with cost changes.

– Exactly. Always provided that in this environment of high uncertainty that we currently face, there will not be any other extraordinary factor that we cannot control.

– There are several fundamental reasons regarding the operation of the supply chain. First, there is the actual time it takes for goods to travel through the supply chain. That is, until the agricultural product produced becomes – at this cost – a processed product that will be sold on the shelf. Secondly, there are contracts that do not use real-time pricing. They are the result of negotiations concerning a certain period of time and are not subject to new negotiations for the corresponding period of time. Third, retail is seeing a broader increase in operating costs. Thus, inflation is slowing down in this phase, and we should expect price levels to level off and stabilize after a while.

– To varying degrees, they occur at all stages of the supply chain, as all participants face higher costs.

The Greek retail market requires particular attention as it is made up of very small businesses or self-employed people.

“We are seeing some opportunistic behavior, hence the antitrust and government investigations. So far, there hasn’t been anything particularly troubling. In fact, everyone struggles and faces the same problems. Only sporadically some opportunistic behavior is observed. They mainly involve suppliers of large brands, who require retailers to raise prices, prices higher than their own cost increases.

– In our retail and wholesale sector, the latter is indeed true. We see that sales are growing, while volumes are falling. At the same time, we are seeing increasing pressure on retailers’ margins. These are the trends that are reflected in the results of companies in the sector. So we see these signs.

– A feature of the Greek retail market is that this sector consists of very small businesses or self-employed people. Our sector is transforming internationally at a rapid pace and businesses in the sector must invest in digitalization as well as in the sustainability of their operations. They should also draw on modern skills. And Greece needs to support these necessary changes in the current environment of high inflation, limited consumer spending power and growing pressure on retail margins. In order for the enterprises of the industry to survive and become competitive. And it’s usually harder to access government support programs if you’re a very small business. It is easier for governments to target big business. The same applies to bank lending. Therefore, special attention is required here.

– A number of European governments have indeed considered the scenario of reducing VAT in the current conditions of high inflation. But there are pros and cons. In the short term, the benefit is for the consumer, who has access to lower prices. But in the long run, things are more difficult. However, this also depends on the amount of VAT applicable in each country, which should be considered before considering such a measure.

– This is a request that comes up frequently in EuroCommerce nowadays. A food price ceiling would be a particularly distortive measure. If, while your operating costs are rising, as is the cost of selling products, you are not allowed to raise the consumer price, then you will put even more pressure on industry margins, which are already very low: 1% -3% on average. And this is at a time when you need money to invest in your transformation. A price cap would be a truly distortive measure.