Mercadona, Spain’s top supermarket chain, announced on Wednesday that it would reduce the prices of a minimum of 500 essential food items. This move comes in response to a cost of living crisis that has led the government to request concessions from retailers.
A couple of weeks prior to this announcement, Mercadona’s president and primary owner Juan Roig stated that his company, which holds a market share of nearly 26%, had to increase prices significantly to sustain margins along the food production chain.
According to a statement released on Wednesday, the company has observed a gradual reduction in input costs and has, therefore, decided to reduce prices. It anticipates that these price cuts will result in an average saving of 150 euros ($165) for its customers this year.
The company has stated that the discounted products will include fresh fish, certain cheeses and yogurts, dried fruit, oil, and household cleaning items.
In September, Carrefour, a supermarket chain in France, initiated a campaign that provided customers with a bundle of 30 essential products for 30 euros. This move came after the Labour Minister, Yolanda Diaz, expressed her desire to collaborate with supermarkets to aid impoverished families in maintaining a healthy diet.
Despite encountering doubt from business organizations and opposing politicians, who considered it an effort to regulate prices, Eroski, a cooperative situated in the Basque Country, implemented a similar strategy in March by reducing the prices of essential food items.
Food costs have risen dramatically across the European Union, with a 16.6% YoY increase recorded in Spain in February. Analysts predict that food inflation has not yet reached its highest point.