Price pressure on identical food brands across EU set to continue

By staff reporter

- Last updated on GMT

Related tags: Retailing, Europe

Ongoing price competition among European retailers has squeezed
prices for international branded foods in recent years, finds new
research from ACNielsen that confirms the pressure will
continue into the near future.

While Euro critics continue to debate the negative effect and impact of the Euro, the survey thattracked the cost of 160 identical branded products in over 25,000 supermarkets across fifteen European countries, found that in 2002, the span of prices from the cheapest to most expensive country was 71 per cent.

But today, "that gap has reduced to 50 per cent"​ said Frank Martell, CEO ACNielsen Europe.

Martell claims stagnating growth and flat consumer demand, combined with an increasing competitive retailing industry, are forcing prices down among Europe's larger markets.

Norway apparently is the most expensive country in Europe to buy international brand products, ranked second most expensive in 2003.

Denmark comes in as number two, while at the other end of the spectrum, Germany remains consistently the cheapest country in Europe to buy international brand products.

Sweden again remained the country with the widest range of price differences, at 44 per cent, although the figure dropped from 52 per cent in 2003, largely due to increased competition within the Swedish retail industry.

Intense price wars and retailer consolidation have sliced away at prices in the UK with consumers over there enjoying the lowest price differences in Europe.

"The UK's price difference has decreased from 37 per cent to 15 per cent in the past three years,"​ say the analysts​.

Across the board, there are specific market factors which affect prices in each country such as taxes, geographical location and transport costs as well as retailers' real estate costs - but the trend in the past three years and into the near future, is further price convergence, though perhaps at a slower rate, predicts Martell.

Related topics: Manufacturers, Pricing Pressures

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