People in Germany will probably have to pay significantly more for groceries in the coming months. “In Germany, food retail prices are likely to rise by more than 10 percent in 2022,” says retail expert Aurélien Duthoit from credit insurer Allianz Trade, summarizing the results of a study. Converted, this corresponds to an average of 250 euros in additional costs per person per year.

Despite the recent increases, retail food prices are far from reflecting actual food price increases over the past 18 months. “The worst is yet to come for households,” warns Duthoit.

According to the study, food and beverage manufacturers have increased their prices in Germany by an average of 16.6 percent since the beginning of 2021. The surcharges were strongest for everyday products, including oils and fats (53 percent), flour (28 percent) and pasta (19 percent) – mainly driven by the Russian invasion of Ukraine.

In contrast, food retail prices have risen by a comparatively modest 6 percent, according to the study. In food retailing, 75 percent of the total costs are accounted for by purchasing. So there is still some catching up to do here. “History has shown that retail prices generally adjust to producer prices, albeit with a certain lag,” says Duthoit.

The overall inflation rate in Germany is already climbing to new heights. In April, consumer prices rose by 7.4 percent year-on-year, the fastest since the early 1980s – driven in part by food. When the Federal Statistical Office publishes the first May data on Monday (2 p.m.), experts expect an acceleration to 7.6 percent.

Inflation and post-pandemic declines in in-store grocery sales have put profitability in grocery retail under pressure, Duthoit says. “In this respect, the price increases are likely to have a significant impact on consumer prices in a timely manner.”

In fact, in a survey by the Ifo Institute, nine out of ten food and beverage retail companies said they were planning further price increases. The main reason for the rising prices is the higher cost of energy, raw materials, other preliminary products and commodities, according to the Ifo.

The agricultural sector has also recently provided anything but reassuring signals for consumers. The German Farmers’ Association recently warned that the tense situation on the agricultural markets as a result of the Ukraine war will probably last for months. It can be assumed that the critical supply situation will last well into the coming year and beyond the 2023 harvest, said Deputy Secretary General Udo Hemmerlin. Therefore, there will also be further price increases for consumers.

An example: dairy products. According to the responsible industry association, they could soon become significantly more expensive. “In the case of milk products with longer contract terms, the price increases in the shops have not yet really caught on. That will only happen in the coming weeks and months,” said Björn Börgermann, Managing Director of the Dairy Industry Association, recently to the “Neue Osnabrücker Zeitung”. Rates of increase of 20 percent could be possible.

Asparagus farmers, for example, are feeling the effects of the fact that consumers already have less money in their wallets. Claudio Gläßer from the Agrarmarkt-Informations-Gesellschaft says that asparagus is an “essential vegetable” that many people associate with higher prices. The result: although asparagus is cheaper than it has been for a long time, significantly less is being bought this season than a year ago.

The large retail chains are meanwhile trying to at least dampen the rise in food prices overall. Edeka boss Markus Mosa has repeatedly appealed to the big brand manufacturers not to go too far with price increases.