Lidl chairman predicts food prices will rise

The chairman of the supervisory board of European discount grocer Lidl predicted a food price push in coming months in an interview published Monday in Germany's top-selling newspaper, Bild.

Lidl chairman predicts food prices will rise
Photo: DPA

“Groceries are not getting cheaper! There will be fluctuations, as we’re seeing now with milk. But the time of sustained price drops is past,” Chairman Klaus Gehrig told Bild.

Gehrig predicted short- and long-term price increases. The worldwide population explosion is driving prices up by increasing demand for food and reducing space for food production, he told the newspaper.

The next step will be for brands that have held their prices steady to this point to follow the trend, he said.

The rising prices are also becoming a source of worry for the government. The German Finance Ministry said a statement on Monday that high food and energy prices are combining with expectations of an economic slowdown to put a damper on consumer spending.

But Lidl isn’t only concerned about the increasing cost of food. Gehrig said board members at Lidl should have apologized personally sooner for the widespread practice of using miniature cameras to spy on employees, which has shocked Germany since newsmagazine Stern broke the story in late March. He said board members were unaware of the practice.

The store’s surveillance logs, according to Stern, recorded details of employees’ private lives from divorce to alcohol problems, illnesses and unemployed relatives. Lidl’s chief executive in Germany, Frank Michael Mros, told Bild in Monday’s interview the logs would be deleted upon approval from government data security authorities.

The grocer will thank full-time employees for their loyalty during the spying scandal with a one-time payment of €300 at the end of April, Gehrig said. Part-time employees will get a prorated amount.

German worker’s union Verdi has called for employees spied on by Lidl to sue the company for damages.



German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.


With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.