He Government will launch the program in June Fair Prices for nearby businesses. A measure that aims to contain the price of more than 100 essential products and, at the same time, reduce the gap that currently exists with the large supermarket chains. A reality that is reflected in the levels of consumption between the different channels.
It is a basket of 108 products that are sold in stores, self-service stores and Chinese supermarkets. As reported, these items will remain at fixed prices until the July 15, to then begin a path of increases of 3.8% per month. Thus, just like what happens in the big chains, the aim is to provide predictability and contain the increases in mass consumption products in a context of high inflation.
Within the list, there are articles of store (oil, rice, noodles, tomato puree, coffee, cookies, flour), as well as drinks (soft drinks, beers and mineral water), dairyproducts of cleaning, perfumery and for babies.
The program, articulated by the Commerce secretarywill include an agreement with wholesale supermarkets (where many neighborhood businesses tend to get their supplies) and supplier companies.
In addition to containing the rise in these basic products, another of the objectives is to reduce the dispersion of prices that exists between Nearby shops and large supermarkets.
“One of the focuses of the basket for local businesses is to reduce the costs of small businesses, working on price negotiations with their suppliers and involving them in the Fair Prices program.”, sources from the Ministry of Commerce explained to Ámbito, and detailed that “this adds to the relief that the program generates in the pocket of consumers who buy in these channels”.
According to different surveys, it is estimated that the price difference between the same products can be in some cases 30%. This logically results in a wide gap in the level of sales between the different channels.
For instance, according to the Scentia report, in April consumption in large chains rose 9.4% year-on-year, while in local self-services contracted 8.7%. In the accumulated annual, super and hypermarkets grow 8.6% compared to the first four months of 2022; while neighborhood businesses fell 8.2% (in the AMBA this contraction is 12.1%).
Fair Prices: how the measure can impact
“The Government is trying to narrow the gap between the Fair Prices of the large supermarket chains and the market prices in local businesses”explained to Ambit Damián Di Pace, director of the Focus Market consultancy, who in any case remarked: “But reality indicates that It is very difficult to give depth to that measurement: basically, because the smallest self-services have a very high level of capillarity throughout the country and you don’t talk to just one company, you talk to thousands of individuals”.
“Whereby, Until now, what has happened with this type of initiative is a very low level of penetration.a level of compliance over time that deteriorated, and the impossibility of generating an agreement that reduces the gap in volume throughout the entire country. It is the difference between the Fair Prices program and the prices that are seen in the gondola where there is no agreement between the supermarkets and the companies”, added the analyst.
When detailing how the program would be carried out in nearby businesses, Di Pace said: “In this case it would be with the wholesalers: therefore, the wholesalers who deliver or sell to those neighborhood self-service stores should respect that agreement. But in practice afterwards it is very difficult to control”.