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Friday 20.07.2018 | Name days: Ramona, Ritma
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Traders: further price gains depend on producers

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RUDespite the excise tax rise on petrol starting from June 1, the leading supermarkets in Latvia do not forecast immediate food and other products price gains. Neither do they expect dropping sales thanks to the economic recovery.

Any changes on the global market also influence businesses in Latvia. This applies also to fuel price fluctuations. For example, along with declining oil and, consequently, also global fuel prices, prices in Latvia might as well remain flat despite the higher excise tax rate. Thus, it is too early to judge about price gains in retail trade, as for the most part it depends on producers whether they decide to raise prices, Ieva Zlaugotne, head of AS Rautakesko marketing department, told the business news portal BNN.

Asked for her forecasts on the purchasing power, she points out the habits of K-Rauta clients in home and garden products, as well as, building materials retail are more or less the same as a year ago. To compare the situation, there is data from all seven countries Rautakesko operates in.

We still see Latvian market as quite inactive and the purchasing power as poor, yet there are also positive trends. The sum of an average purchase at K-Rauta has been climbing for some time already. All in all, the purchasing power has slightly surged, so there are no grounds for sales to drop in the future, she says.

Similarly, also supermarket chain Rimi points out only prices suppliers (producers and distributors) decide upon will surge. Neither does the store plan surcharging the goods itself, as the total costs of fuel form only a minor part of all the expenditure.

Moreover, in terms of Rimi logistics, fuel price gains have made the company optimize supplies as much as possible.

We turn more attention to the routes and use the cars as efficiently as possible, says Dace Valnere, head of Rimi public relations department, adding that alcoholic beverages suppliers have raised prices of strong spirits about 6-7%.

In connection with the excise tax rise on fuel, which, in fact, applies only to petrol, not diesel fuel, it is at the moment too early to forecast what impact this will have on the purchasing power. However, the constantly growing tax burden is definitely having a negative impact on it, she says.

Whereas, supermarket chain Maxima representative Ivars Andiņš told BNN they do not plan any automatic surcharges on June 1, as no producers have told that. Neither will the store itself surcharge any products.

This does not, of course, exclude producers will add some surcharges in future, as fuel is after all a crucial resource, he says, pointing out the current goods have been produced for the previous price, which is why prices are not yet surging.

On the one hand, price gains damage purchasing power, but on the other hand, it is growing thanks to the gradual economic recovery. Which aspect will take the upper hand it is yet difficult to forecast, Andins stresses.

 


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