Life after the price cap in Hungary: how have prices changed?

The price freeze was officially scrapped on 1 August. And supermarkets were compelled to readjust the tags of most of the previously price-capped goods. Many shoppers believed that the prices would skyrocket after the abolishment of the price cap. However, both price rises and price falls can be witnessed.

Napi.hu reported the price changes concerning basic staples. They examined whether there is any ground to fear a drastic increase in the cost of groceries post-price cap. Eggs and cooking oil have become cheaper in many places, but the price of granulated sugar, flour, pork legs, and chicken breast has shot up. UHT milk and chicken wings have remained unchanged in some places regardless of whether there is a promotion in effect.

Right after the abolishment of the price cap, the prices did not show significant changes. A minor increase in the case of certain basic foodstuffs could be seen though. The six biggest chains, Lidl, Aldi, Tesco, Auchan, Spar and Penny followed more or less the same pattern regarding the price changes.

Growing demand

A group of employees of a popular chain spoke to napi.hu anonymously, recalling that in the week before the abolishment of the price freeze, there was a noticeable increase in demand. For example, customers stocked up more than usual on flour, sugar, cooking oil and UHT milk, and several shops experienced higher sales of meat products that were still available at fixed prices until the closing date, this Monday. It should be noted that most chain shops ordered months ago that only a limited quantity of basic price-capped foodstuffs could be purchased at a time. However, most shops have scrapped this restriction now.

Due to the last-minute panic shopping before the abolishment of the price cap, some shops were left with empty shelves. In some supermarkets, on the afternoon of 31 July, there were very few or no price-freeze products on the shelves or counters. For example, the cheapest UHT milk, eggs, cooking oil, and chicken breast were out of stock in numerous places.

Price changes post-price cap

Retailers had a busy night after closing the shops on Monday. Employees had to re-price the basic foodstuffs released from the price cap by Tuesday morning. After opening on Tuesday, the staff did not see more customers than usual. However, shoppers are getting more and more price-conscious. They are in a wait-and-watch mode, following the latest updates on the price changes. According to experienced shopkeepers, it might take a month to predict how demand will pan out in the relevant product groups.

So far, the price of granulated sugar has doubled in many grocery stores. Meanwhile, wheat flour costs more but remains below HUF 200 (EUR 0.51) per kilo. Sunflower oil is now cheaper at several chains, while the price of UHT milk might fluctuate a bit in the future. The price of meat has seen the biggest increase. The price per kilo now exceeds HUF 2,000 (EUR 5.1). However, some shops have introduced special offers that allow customers to buy meat at a reduced price. Surprisingly, eggs have become cheaper. Usually, the larger sizes are sold at a lower price at the moment.