Temporary reduction in VAT on essential foods such as meat, fish, vegetables, fruit and milk, from 5% to 0%, has been in force since February 1, 2022 in Poland.
The Polish supermarket chain Biedronka, jewel in the crown of Jerónimo Martins, will not increase the prices of more than 4,000 food products despite the Warsaw Government having decided to reinstate the 5% VAT from April.
The announcement was made by the retailer itself, which holds the largest market share in Poland, where it had 3,569 stores at the end of last year, according to Bloomberg.
According to the group’s report and accounts, the “joaninha” brand earned 21,500 million euros in 2023, that is, the equivalent of 70% of the group’s sales, which also operates in Portugal and Colombia, which rose, for the first time, at 30 billion euros. Jerónimo Martins’ performance in the Polish market in 2024 has generated concern among analysts, especially after the group reported “surprisingly, there was a drop in volume in the food retail market in January” and admitted ” extreme pressure.”
“To mitigate the extreme pressure that comes from the rapid fall in food inflation combined with high cost inflation, Biedronka, with a strengthened value proposition, will work to convert into volumes and a sales mix of greater added value an environment which is expected to be more favorable. Still, and also given the company’s decision to continue investing significantly in updating its teams’ salaries, we do not exclude that Biedronka’s EBITDA margin may come under greater pressure than that recorded in 2023“, stated the chairman of the board of directors of Jerónimo Martins, Pedro Soares dos Santos, about the prospects for 2024, in the message accompanying last year’s financial results.
According to Bloomberg, in addition to Biedronka, other retailers intend to follow this stance, such as the German Lidl, which, over the weekend, announced that it will keep the prices of 1,600 food products unchanged in its 450 stores.
The temporary measure to reduce VAT on essential foods such as meat, fish, vegetables, fruit and milk, from 5% to 0%, included in an “anti-inflation” package from the Polish Government, has been in force since February 1, 2022 .
