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Easter feast gets cheaper, but higher VAT looms for Easter Monday

FOOD & AGRICULTUREEaster feast gets cheaper, but higher VAT looms for Easter Monday

For the first time in 3 years, food is cheaper this Easter than it was a year earlier. The basket of the 10 most important holiday products has decreased in price over the past year by 20 percent. However, on Easter Monday, prices will rise again due to an increase in the VAT rate on food.

After three years of continuous increases, we are facing the first Easter during which food will not be more expensive than a year earlier. Over the past year, the basket consisting of the 10 most important holiday food products purchased by Polish families has decreased in price by 20 percent. Importantly, the prices of all the products in the basket have fallen, which means that food for Easter should be cheaper for most families. During the holiday season, when we buy more food than usual, lower prices should provide relief for tighter household budgets.

However, the past few years of inflation and rising food prices have left their indelible mark on the prices of many products. Current price decreases do not signify a return to the price level of food from 2020 or even 2021. The current price level is similar to that recorded during Easter in 2022.

The prices of individual products have fallen over the past year from nearly 30 percent in the case of yellow cheese to 9 percent in the case of pork ham. Sugar prices in Polish stores are currently 26 percent lower than a year ago, which is a result of a 20 percent drop in sugar prices on global markets over the past 6 months. We have finally won against “eggflation”, as egg prices have fallen over the year by 23 percent. On store shelves, you can also see the effect of the drop in grain prices and the import of cheaper products from Ukraine – flour prices have fallen by 18 percent and pork loin prices have fallen by 13 percent (this is affected by lower feed prices).

The basket of basic products has decreased in price by 20 percent, while – according to GUS – the inflation of food and beverage prices was 2.7 percent year on year in February, and the general consumer inflation fell to a record low level of 2.8 percent. Food prices in February fell by 0.4 percent month on month.

The level of food product prices is influenced by many factors, apart from global prices. The agricultural policy of the European Union, as well as supply and demand on the domestic market, also play an important role. The pricing policy of intermediaries and retail chains also affects the prices of food products. This year, the price war being waged between two large retail chains in Poland – Biedronka and Lidl – is affecting food price reductions. Both are fighting for the title of cheapest supermarket, lowering prices on selected products. However, these reductions usually apply to the most popular products (including those in our comparison), while the prices of other products remain unchanged or even increase.

It is worth remembering that after Easter, food will become more expensive again. This is because this year’s Easter, which we celebrate on March 31 and April 1st, coincides with an increase in the VAT rate on some food products from 0 to 5 percent. The government is retracting the VAT reduction introduced in 2022 to fight inflation. This means that when we visit the shops on Easter Monday or the next day, the prices of many products will already be 5 percent higher.

[Table] Ten most important food products arranged according to price decrease in the last 12 months:

March 2024 March 2023 price change
Yellow cheese 1 kg 21.37 30.08 -29%
Oil 1 l 9.36 12.82 -27%
Bread 1 kg 5.20 7.07 -26%
Sugar 1 kg 4.90 6.63 -26%
Eggs 10 pcs 7.15 9.32 -23%
Flour 1 kg 3.65 4.45 -18%
Milk 1 l 3.81 4.62 -18%
Butter 200 g 5.50 6.45 -15%
Pork loin 1 kg 19.11 22.08 -13%
Ham 450 g 21.77 23.97 -9%
Total: 101.82 127.49 -20%

Source: Dlahandlu.pl, eToro calculations

Paweł Majtkowski, eToro analyst in Poland

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