A comparison of online shopping baskets revealed a surprising result: food prices in major retail chains have dropped to levels seen a year ago. 

For instance, a shopping cart at Rimi costs less now than in the past 11 months; last year, it was over €70, and now it’s under €63. Barbora’s cart is also €6 cheaper than last September. Data is collected on the 10th of each month. Prisma still hasn’t returned to its previous year’s prices and currently offers a cart that’s €5 more expensive. Selver’s prices are €2 higher than 11 months ago.

Rimi is experimenting with its pricing. Throughout the year, Prisma has offered the most stable and affordable prices. Barbora’s food prices rose until this April and then decreased. Rimi’s prices have fluctuated as they search for the right pricing strategy. Selver consistently has the highest prices.

Regardless of the general price level of the retail chain, all have returned to last autumn’s price level. Bread products have been the most stable in price across all chains.

Fruits and vegetables were most expensive this April, and since then, prices have dropped. Currently, Rimi offers competitive prices for dairy products. It is cheaper for coffee cream and on par with Prisma and Barbora for milk, kefir, and butter. However, their cheese prices are not competitive.

This month’s cheapest online shopping cart was in Prisma, costing €65, and the most expensive was in Selver at €78. The price difference between the most affordable and costly chains was over €13. Price gaps across all categories were similar, ranging from €3 to €4.

People do not compare shopping baskets.

Despite the above price drop, items are still more expensive for most shoppers. The prices of food in stores have risen significantly faster than the prices of input agricultural products and their processing, it is reported. 

For instance, the price of agricultural production and its processing in the food sector has risen by about 35 per cent over three years. Yet, prices in retail stores have increased by nearly 50 per cent over the same time frame.

Prices are higher due to insufficient competition in Estonia. Producer prices have fallen, but in-store retail prices have not.

Also, Estonian consumers tend to be loyal to the seller’s brand. They go to Selver, Rimi or one of their favourite stores, even if prices are lower in the following store, 200 metres away.

In other countries like Germany or the UK, products are often assessed by an independent consumer organisation as to whether they are high-quality or low-quality. There is nothing like that in Estonia, and it doesn’t look like it is coming any time soon.

Store pricing generally depends on category management strategies, meaning that a seller puts a different markup on each product. It is possible that they will place a higher markup on those products they know they can charge a higher price for, while they can put a significantly lower markup with another category when, for example, there is very tight competition with another retailer in this product category.

The idea of ​​markup is to cover the cost of the trade by selling that product and making a profit. In the food trade, overheads are relatively high. They are primarily related to a store’s space, equipment, utility costs, rent due to the owner, and wage costs. 

Profit margins in the food trade are minimal since it is a volume business. They usually hover somewhere between the two and four per cent mark. For example, the profitability of the food industry is significantly higher. In contrast, the profit margin regarding fashion goods is higher because it is not such a large volume business.

Getting more from your shopping basket

Whether you compare shopping basket prices or remain loyal to your favourite supermarket, one way to help with the cost is to use a cashback credit card from MoneyHub.