In the ongoing battle for customer loyalty, discount retailers are locked in price wars, yet the influence on inflation appears to be minimal. Jacek Kotłowski, the acting director of the Department of Economic Analyses and Research at the National Bank of Poland (NBP), quantified the impact as ranging from 0.1% to a maximum of 0.2%. These remarks were made during a press conference where the NBP unveiled its latest inflation report, which includes projections for inflation and GDP growth.
Kotłowski elaborated on the competitive price dynamics among the largest retail chains and their effect on market prices. “Consumers feel the pinch of high prices, and companies face demand barriers, leading to price wars. We’ve seen price drops among the major discounters involved in these battles. While not all may have joined this fray, significant actions by any two major networks likely influence the entire market,” Kotłowski explained.
He also highlighted uncertainties in capturing this effect in official statistics, as the National Statistical Office (GUS) conducts its surveys across Poland, not limited to these specific stores.
According to the NBP’s inflation report, the bank has prepared two sets of projections. One assumes the continuation of protective measures, including a zero VAT rate on food and anti-inflation shields for energy, gas, and heating. The other foresees an end to these protective actions.
If protective measures are sustained, inflation is projected at 3% in 2024, 3.4% in 2025, and 2.9% in 2026. Without these measures, inflation could reach 5.7% in 2024, stabilizing to 3.5% in 2025 and 2.7% in 2026.
The NBP’s report also forecasts economic growth, predicting a GDP increase of 3.5% in 2024, 4.2% in 2025, and 3.3% in 2026, assuming protective measures are maintained. Conversely, abandoning these measures might result in growth rates of 3.2% in 2024, 3.6% in 2025, and 3.2% in 2026.
This nuanced analysis suggests that while discount wars play a role in shaping consumer prices, their overall impact on the economy and inflation remains limited.