Poland: Retail prices rise by 4.3% in August, led by soaring fruit and vegetable costs

Retail prices in Poland surged by an average of 4.3% year-on-year in August, up from 3.9% in July and 3.1% in June, according to a report by UCE Research and WSB Merito University. Notably, prices for fruit and vegetables rose sharply during the typically stable summer season, increasing by 9.1% and 6.3% respectively.

“The pace of price hikes has been accelerating month by month,” the report stated. “In August, almost all of the 17 categories analyzed saw price increases. Among the steepest were soft drinks, which surged 10.2% year-on-year, and sweets and desserts, up 9.3%. Unusually for summer, fruit and vegetables also saw significant price increases, reflecting shifting market dynamics.”

Robert Orpych from WSB Merito University attributed the rising prices to increasing production costs, wages, and energy prices. “The formation of shop prices is heavily influenced by these factors, and we expect them to continue shaping the market in the coming months,” he noted.

Soft drinks saw the largest price increase in August, rising 10.2% year-on-year. The hot summer weather boosted demand for beverages, allowing manufacturers and retailers to raise prices, said Artur Fiks of WSB Merito University. “Consumers prioritize quenching their thirst over price analysis during heatwaves. Combined with higher production costs, this trend is likely to influence future pricing,” Fiks explained.

Sweets and desserts ranked second, with prices rising 9.3% year-on-year, driven by the high cost of raw materials like cocoa and the energy-intensive production process. Fruit came in third, with a 9.1% increase, followed by vegetables, which saw a 6.3% rise after a 5.6% decline in July.

Household chemicals, which had been in fourth place in July with an 8.7% increase, saw a more modest rise of 5.3% in August, reflecting a slowdown in price growth. However, Fiks warned that this trend might be short-lived due to rising energy and gas costs, which could drive production and retail prices higher in the coming months.

Fats experienced the smallest increase, rising just 0.4% year-on-year after years of steep price hikes. The category, which had seen significant inflation in recent years, appears to be stabilizing for now.

However, Fiks cautioned that the situation could change rapidly. “Weather anomalies are expected to reduce cereal and crop yields in some regions, which could drive prices higher even for products not directly affected by the weather. As substitutes for pricier goods, these items may also see price increases.”

The findings are part of the “Retail Price Index” report, produced monthly for nearly seven years by UCE Research and WSB Merito University. The August 2024 edition compared over 86,000 retail prices from more than 40,300 stores across Poland, covering 17 categories and over 100 frequently purchased products.

The authors emphasize that the report should not be interpreted as a measure of overall inflation but rather as an analysis of price trends in the retail sector.

Source: UCE Research, WSB Merito University and ISBnews