Lazy eyes listen
According to a Nikkei article, inflation in Western Europe is still raging, with monthly consumer prices rising by more than 14% in the UK and more than 10% in Germany. According to the report, some shops have raised their prices out of proportion to their underlying expenses.
According to the outlet, over half of the price hikes in the region were caused by local businesses passing on greater costs to consumers. Consumption has fallen across the region as pay growth has lagged behind price hikes.
The Nikkei cited a management consultancy Oliver Wyman’s analysis of annual results from 70 European food retail and manufacturing companies, which reportedly found that absolute EBITDA (earnings before interest, taxes, depreciation, and amortization) rose by 11% at food retailers and 12% at manufacturers in 2022, compared to 2017.
“Companies in the food sector viewed the inflation context as an opportunity to review their price management,” said Rainer Muench, partner at Oliver Wyman.
According to IMF figures quoted by Nikkei, corporate profit growth accounted for 45% of inflation in Europe last year, which was greater than the 40% ascribed to increasing import costs. According to a European Commission poll of households, the perceived rate of inflation over the past year has risen to 26% among low-income families, the most in 20 years.
Earlier this year, Bank of England Governor Andrew Bailey accused domestic retailers of fueling ‘greedflation,’ alleging that certain businesses were “overcharging customers” while millions of people struggled to make ends meet. The Bank of England has also advised that British people and businesses must recognize that they are worse off and should cease demanding salary increases and raising prices.