Trade reduces its margins in Spain, despite accusations launched by the government against the sector, denouncing that companies are taking advantage of rising prices.

A study by PwC shows that commercial margins fell to 5.7% last year, compared to 6.5% in 2021 and the average profitability of 7% they had in 2020. The data also contrasts with the margins of the business sectors as a as a whole, with a margin of 10.4% in the last year, compared to 9% in 2021.

The supply crisis caused by the drought is contributing to worsen a national and international scenario in which containing food prices has become a priority for all governments. Each country has its recipe for trying to stop price escalation, but the main economies in our environment are not managing, so far, to try to stop a food escalation that, due to the problems arising from geopolitical conflicts, are now added to adverse weather conditions. the supply of essential agricultural raw materials for the food industry.

weight in statistics

The food retail trade is the one that has the greatest weight in the statistics and the first results presented by the main distribution chains attest that, in 2022, companies in the sector assumed costs higher than the price increase applied and that profit margins dropped.

The analysis of the margins of the entire agri-food chain shows that this cost containment exercise is common to all agents. The Food Origin and Destination Price Index (IPOD), which indicates how much the price is multiplied from the origin of the products to the consumer, is currently at its lowest value in the last ten years. This shows that The entire network lowered its margins so as not to pass on the full increase in costs to households.

For months now, Spanish companies have been adopting measures to try to help families face the complexity of the moment because, as the general director of Aecoc, José Mª Bonmatí, considers. As he says, “we not only understand ecWe do not share society’s concern, but the entire value chain is working more than ever in search of formulas to stop price escalation as quickly as possible”.

“In the current context, all the links in the agri-food chain are strengthening their collaboration and dialogue to be more efficient and assume part of the increase in costs”, explains the general director of Aecoc, José María Bonmatí.

To this end, the Spanish government approved at the end of last year a VAT reduction on certain food products. A measure that, in the opinion of Aecoc, is correct because “in February we have a food inflation of 16.6% – which is a lot – but if it had not been applied we would be at 18.1%”.