Eroski fully enters the price battle in the supermarket with its own basket of basic products at more affordable prices to try to win over customers at a time when they “need to consume in a way of savings”.
The distribution group announced the launch of La cesta que enamora, a basket of 1,000 basic products and top sellers at “increased prices”, as announced by Beatriz Santos, Eroski’s commercial director. The campaign would run at least all of 2013.
52% of the products that will be highlighted in their stores so that the consumer knows them, will be food of the day, which includes dairy products, vegetables, fish, legumes, fruits, oils, eggs or pasta. 20% will be personal and household care products, the rest will correspond to other products for occasional consumption such as sausages, cookies or chocolates.
“More than half of the products will be priced below 2 euros and more than 200 products will be below 1 euro,” said Beatriz Santos. 35% of the products will be their own brand, while 65% will correspond to the manufacturer’s brand.
The company will have to invest 56 million dollars in 2023 to contain the price of products, which is 12 million more than in 2022. “In total, we are going to say 100 million in two years to adjust our price,” says the director of marketing Eroski. The group did not say how many of the 1,000 products listed will fall in price, although it has indicated that more will be coming, and how many have signed up for the Thanksgiving campaign.
The group promises that this campaign will not respond to the agreement between the distribution and the French government to establish a basket of products on French soil, nor to reduce the pressure that the Spanish executive has on its food prices.
Margin Pressure
Eroski affirms that the market is experiencing a “complex and unpredictable period, with the client already entering a mode of saving, a distribution sector that has greatly highlighted the margins and artisans who have improved their bargaining power due to tensions in the value chain. and imbalances between supply and demand”.
The supermarket group says its prices will rise by 12% in 2022, while its costs have risen by 15%. “We are doing a great job, with a price of 2.3 points below our market reference,” says Beatriz Santos. He defined the provision, however, that consumer spending in his stores rose 6.8%, because “less is bought, more own brands are bought, and the more expensive slaves are cheaper”.
“Eroski inflation is not progressing. It is not necessary to ask for it, it has already happened, because the mismatch of the increase in costs and prices will already cost us 44 million in 2022”, the group indicates.
The company claims that in 2022 it has carried out various campaigns aimed at prices and from a boost to the private label (it already accounts for 27% of sales), a major promotion activity (with 335 million focused on discounts) and a price freeze, especially at Christmas.
However, the group claims that this new campaign has been launched because “2023 is also at a high price level”. Eroski states that in January its costs increased by 21.5% compared to the same month in 2022, while its prices rose by 14.9%, which increased the disparity in margins.
