
Swing prices of butter
We took under lup over 5.2 thousand prices (regular and promotional) of standard cost butter (200 g) in retail stores . Analysis UCE Research, Hiper-Com Poland and Group Blix showed, that in the whole 2024 year w. the product has increased by 7.2% on average year. The largest increases were visible in supermarkets – by 11.3%, in chains cash & carry – by 9.9%, a also in convenience stores – 9.7%. From both least growths rd. recorded convenience and hypermarkets – by 1.2% and 2.6%, respectively.
– The price increases resulted from restrictions on milk production in the first half of 2024 year in some parts of the world, among others. in New Zeland, which is the largest in the world exporter of butter. Another reason was the low annual delivery dynamics in the EU. The structure of production of milk products in countries in the Community has also changed. Because of the low prices of butter, producers have transitioned
to producing other, more profitable products, among others.among others, cheese – explains dr Mariusz Dziwulski from PKO BP.
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Butter prices shape many factors, but there are 2 major causes of the increase
Buttermilk war discounts
From the rail dr Piotr Arak of VeloBank notes, that the price increase of over 7% is still nearly two fold more than the average reading of inflation CPI from last year. Butter is a product, for which the discounters have decided to wage a price war. They fought to take a larger part of the market.
In the face of the butter war of discounters, the networks have abandoned the restrictive approach to setting the price of butter, because at the unstable market and so that the price does not stand out. Butter has also been a product, whose price regularly is remembered by consumers. Today most people have in memory the cost of purchasing the product in promotions. So the price regular is going up, to recover the margin and to make the promotion – explains Piotr.Biel from Group Blix.
In the whole 2024 year a cube of butter costed on average about. 6.4 £ (in 2023 year – about 5.9 £). From analysis it follows also, that in ub.year, butter in shops was experiencing a real “swing in price”. The beginning year was marked by strong declines, i.e. from -14.3 to -4.4% year. On the other hand then the product started going up strongly – from August to December on average in from 25.1% to even 37.5% rdr.
– The dynamics of buttermilk prices were strongly differentiated over the whole of last year. In the first quarter 2024 prices of butter were still lower in yearly relation. Growths at wholesale level were observed from the second quarter, when supply in world markets started decreasing. Retail prices of butter from January to December 2024 year increased by over 20% – informs dr Dziwulski.
Promotions on minus
According to report, in 2024 year. trade networks made by 12.5% less promotions on butter than in 2023 year. What interesting, in that same period
total rabate actions in stores were by over 12% more than the year previously. Piotr Biela states, that butter was and
is the most searched by consumers promotional product. While the succession is becoming expensive in the market, the promotional prices
have been maintained, recognizable as attractive by customers, is at high cost to the part of trade networks.
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This tool tracks promotions na maslo. You can check, where you will pay at least
– With established from up yearly budgets in trade networks, they could take three possible directions. The first is to maintain the promotional price and the frequency of promotions, but not the budget. Second strategy is to increase the price of promotion, maintain the frequency of promotion, and exceed the budget. The third option is to maintain the promotional price, reduce the frequency of promotions and make the budget.realization budget. Business and visionarily most networks have selected this last option – explains expert from Group Blix.
To this dr Arak adds, that because of changing milk prices promotions on milk may become less profitable. Margin on this product may have decreased. – Networks may have focused on promotions products with higher margins. Beyond this, butter is a basic product on the Polish market and enjoys stable demand independent on promotional actions. This is why people have started reacting to high prices. Everyone and so a cube of butter purchased, that feels that he is paying much more than a year previously – remarks an expert from VeloBank.
According to report, the share rabat most restricted network type cash & carry – rd. at a level of 25%, supermarkets – 24.6%, a also hypermarkets – 15.3%. From customers they made more than a year previously consigners and networks convenience – growths were about 16.6% and
1.8% rd, respectively.
– Formers, operating often at higher margins, were more affected by inflationary pressures and increasing operating costs
. This has forced it to limit the number of promotions on products of high rotation,
such as butter. From other discounters, which based on high volume sales, may have allowed themselves to intensify promotions, to attract sensitive price customers. Networks convenience, though in less decreased promotions, have attempted to compete, offering attractive price conditions for products of everyday needs, which attract customers from local environment – comments Julita Pryzmont from Hiper-Com Poland.
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More promotions on milk. For now further increase prices
Prognosis prices for 2025 year
– My opinion, high butter prices will remain in the next months, though their annual dynamics will decrease m.among other things, from attention to the effect of the base statistics. I do not exclude, that the end of the year may bring even declines. The limiting factor is the factor.Further increases in the market for butter is a barrier to demand. Consumers in conditions of high prices with confidence are looking for alternatives in plant-based products for lubrication – predicts dr Diwulski.
From the Julita Pryzmont predicts, that in 2025 year the prices of butter may be more stable than in 2024 year, though increases in the first months are still likely. This is related to the continuing impact of inflation, which continues to increase the costs of production and logistics. If the inflationary pressure does not remain, but but but the tempo of those increases will probably be more moderate than in 2024 year.
– Average price of a bone of weight 200 g in 2025 year will probably be about 6,8-7.0 £, assuming a moderate increase in costs and maintaining high competition between networks. Consumers should however be prepared for significant differences in prices dependent on store format and period year. Stabilization of prices may occur only in the second half of year, provided that inflation begins to slow down, which would reduce cost pressure in retail trade – prognoses an expert from Hiper-Com Poland.
However, dr Piotr Arak expects a more stable trend inpricing.Milkpricesarenormalizing,costsofraw materialsalso,andthe onlythingthatmightchange,isaradicalincreaseinconsumption.among othersinChina,whichattimesisnotvisible.Intheexpert’sopinion,withmoderatepressuresinflationtheaveragepriceof abone(200g)in2025yearmaybeabout6.7-6.9£.
-The priceofbutterinlargemillisderivedfrominterferenceinthedairymarketanddecliningproductionofbutter.Thelesslimits,quotas,restrictionsandregulation,thethepriceislower.In2025yearI expectthepriceofbutterincirclesof9-11£inregular,withpromotionsreachingabout5£.Butterisonlyaproductandmoreinconvenientforthenetwork,soIforecastadecreaseinthenumberofitspromotions-summarizesanexpertfromGroupBlix.
Source:MondayNews
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