Food products are becoming more expensive at a faster rate
According to Eurostat, food and non-alcoholic beverages in the EU rose in price by around 33.2% between 2016 and 2025, making them the fastest growing category in the consumer basket.
Globally, theOrganization for Economic Cooperation and Development (OECD) estimates that food price levels by mid-2025 were nearly 46% higher than in December 2019, Euronews reported.
That said, lower inflation is not lower prices. If the rate drops to 2.8%, for example, it only means slower growth, not cheaper goods. The “price mountain” has already been built, it’s just that the climb has become less steep.
The “sticky price” effect
One of the key drivers of current pressures is rising wages across the supply chain, from agriculture to logistics to retail.
Research by the European Central Bank estimates that agricultural wages rose by around 6.2% in 2022, with a further 5% increase in 2023. In the transportation and warehousing logistics sector, growth was as high as 6.3%.
According to ING Research, labor costs account for about 10-15% of costs in the food industry, which means that their growth is inevitably passed on to retail prices.
Additional pressure is also recorded by McKinsey & Company: in 2025, labor costs in Europe will grow by an average of about 5.1%, remaining above the rate of food inflation.
Raw materials push prices up
After the stabilization of energy and logistics markets, commodity factors have come back into play. According to Eurostat, milk prices rose by around 12.6% (year to Q1 2025), eggs by 10.7% and cereals by 9.6%.
In some categories, the increase is even stronger: chocolate added almost 18%, frozen fruit 13% and beef 10%. In some EU countries, the price increase for chicken eggs exceeded 20-30%.
At the same time, farm prices reach the shelves months later, creating the effect of “inflation with a delayed echo”.
Retail is unable to absorb rising costs
The common perception of supermarket profits is not supported by structural data.
The analysis, published on the basis of a sample of almost 89,000 European manufacturers, shows that margins generally even declined between 2013 and 2022.
According to S&P Global and McKinsey, the average retail operating margin in Europe is around 2.8%. Many companies have still not recovered their pre-Code levels of profitability.
This means that rising costs for raw materials, energy, packaging and wages are almost inevitably passed on to prices.
The East pays more than the West
EU averages hide a strong gap between countries.
According to Eurostat, France had a food price index of 135 (2015 = 100), Poland about 174, Lithuania: about 177, Estonia about 180, Hungary more than 204.
In Eastern Europe, food also takes a much larger share of the budget. For example, in Romania it is about 25% of household income, in Bulgaria about 21%, in Germany about 11.5% and in the Netherlands about 11.7%.
The economic reality looks paradoxical: inflation is going down, but life is not getting cheaper. The reason is that the current “normalization” of prices is taking place on top of the already formed price spike.
The European Central Bank forecasts that food inflation in Europe will remain elevated (slightly above the 2% target) until at least 2027.
In other words, supermarkets are not getting cheaper: they are simply no longer getting more expensive as fast as they used to.
