What grocery stores have cheap groceries
How cheap can food be?
Supermarkets attract with low prices. Does it have to be that way?
Cured roast beef cut down by half, two kilograms of chicken thighs for 3.99 euros: In the competition for customers, supermarkets regularly lure people with bargain promotions for groceries.
This not only upsets farmers who have been protesting across the country for months - against additional requirements and costs for environmental and animal protection, but also for more appreciation for themselves and their products. The federal government has taken off the boil. After an “agricultural summit”, Chancellor Angela Merkel (CDU) invites retailers to talk on Monday. It's about an exchange, but one that comes with some expectations.
What is the relationship between trade and producers like?
The leading retailers - Edeka, Rewe, Aldi and the Schwarz Group with Lidl - together control more than 85 percent of the food market in Germany, according to the Federal Cartel Office. This gives the "big four" enormous purchasing power. It is difficult for those who are not listed with them. Federal Food Minister Julia Klöckner (CDU) speaks of a relationship like that of David against Goliath: "This is how producers currently feel when they negotiate with retailers - eye level is not given." And that is also reflected in the prices.
How does retail deal with suppliers?
When it comes to price negotiations, there is often a tough fight. This can go as far as the temporary boycott of certain products in order to put suppliers under pressure. Even well-known big brand manufacturers such as Nestlé or Coca-Cola have felt this in recent years. Their products are much more difficult to replace for retail than offers from farmers and other smaller providers. "A price pressure from the trade to the detriment of animal welfare and environmental standards is not in the interests of consumers," says the head of the Federal Association of Consumers (vzbv), Klaus Müller.
How are the farmers affected?
Klöckner warns of long-term low prices. Appreciation for products and producers could not arise from the consumer if meat, fruit and vegetables were partly sold off. "On the contrary: you get used to it, the trade educates its consumers." The victims at the end of the chain are the farmers, who have fewer left, even if they have to deliver higher standards. From one euro that consumers pay for food, the producer receives an average of just under 21 cents, as the state-owned Thünen Institute determined based on data for 2018. 20 years ago it was more than 25 cents. Retailers also have an ethical and moral duty to ensure "fair" prices, emphasizes Klöckner.
What does the trade say about the allegations?
The industry feels wrongly pilloried. The German Trade Association (HDE) emphasized: "Food is not wasted here." In terms of food prices, Germany is around two percentage points above the average of the former 28 EU countries. In addition, there are "global price dependencies" that cannot be controlled in Germany. Rewe boss Lionel Souque reminds us that many people have to look at every penny when shopping. "In Germany around 13 million people live in poverty or on the poverty line. Low food prices enable these people to eat healthily and safely." The trade wants to continue to ensure that.
Why do supermarkets rely on promotions with low prices?
Despite all the debates, it is clear that many customers love bargains. For almost two thirds (65 percent) of German citizens, special offers are important when shopping, as the market research company Nielsen reported in its study "Consumers 2019". In the face of tough competition, no retailer can afford to disappoint these expectations and jeopardize their "price image". Lidl only saw a few months ago how sensitive many consumers are to prices. The discounter only wanted to sell bananas with the Fairtrade seal, which should cost 10 to 20 cents more per kilo. But consumers didn't play along and bought from the competition. In the end, Lidl had to row back.
What other problems are there?
Politicians also want to address controversial trade practices. A vegetable farmer sometimes gets a fax early in the morning that instead of 30 pallets of lettuce ordered the evening before, there should be only 15 pallets, explained Klöckner. "Then he can throw away the other 15 pallets." In order to prevent such a thing, a corresponding EU directive should be implemented "one to one". Consumer advocate Müller demands, among other things, binding labeling when food is produced according to higher standards. Many customers are willing to pay more for it. "At the moment they can hardly tell the quality of a product, especially not by the price."
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