Inflation and Prize Freezes Hit Spar Hungary Too

“Cashiers and stockers complain a lot that customers are nervous, that prices are falling because of them," the top manager at Spar Hungary, Gabriella Heiszler, said in an interview with the Hungarian Forbes magazine. In fact, after a purchase, all she could say when seeing the bill is "oh my goodness," she is quoted by the business news site napi.hu.

At Spar, they see that everyone most people have started to purchase cheaper, private label products. They have noticed a drop in sales volume since early summer. According to Gabriella Heiszler, in times of crisis, customers tend to buy cheap carbohydrates. "Even though pasta is more expensive, it is still cheaper to feed a family with pasta than with meat or vegetables. We are also seeing a change in the sales of bakery products, bread has become more popular: a kilogram of bread is cheaper than a kilogram of buns or other bakery products," she said.

The retail chain is due to pay HUF 10.5 billion in extra profit tax to the Hungarian government in November. This is not good news: in the food industry, a few percent drop in sales is a significant drop. This is also forcing the management to cut costs: in winter, the temperature in the store will be 18 degrees Celsius instead of the usual 21 degrees. Meanwhile, they also need to recruit new staff: they are currently short of 500-600 workers, mainly from the Budapest and Sopron areas.

"The real problem with the price freezes is that the official price is only strangling the retail trade. There are producers, manufacturers and wholesalers, but the official price only binds us, the retailers. The price freezes have been in place for more than eight months, and we are still making losses on products with the official price," said Heiszler.

She does not expect a drop in food sales this year, saying that inflation at Christmas will basically affect what gifts people buy. “January, when inflation is expected to peak and everyone will have to pay a hefty utility bill, will be interesting.” However, she thinks it is realistic that chocolate Santas will become a luxury and people will prefer to buy chocolate bars in the coming weeks.