How Supermarkets View the Day After the Gross Profit Margin Cap

Friday, May 30, 2025

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The cap on gross profit margins for food, essential goods, and fuel remains in effect until June 30, 2025 - a measure that started as a temporary intervention during the Covid-19 era but has been extended for more than three years. The amendment submitted by Development Minister Takis Theodorikakos acknowledges that this is a strict but necessary tool that substantially contributed to price control amid inflationary pressures. However, from July 1, 2025, the retail landscape changes. The cap ceases to apply to businesses, which now gain the freedom to formulate commercial policy without the regulatory framework that has accompanied them in recent years.

As sources from the Bazaar chain characteristically comment, the measure was established to protect the market under exceptional conditions, "but its excessively long-term maintenance was making it abusive." Metro AEVE has a similar approach, noting that price increases are not expected, as the nature of the market prevents them: "The food market is extremely competitive. It cannot allow margins for unjustified increases. However, we will be relieved of the bureaucracy imposed by compliance with the law. Product prices are affected by their purchase cost. In this context, our commercial policy will be shaped by the healthy forces of the market, competition between businesses, and consumer behavior."

Lidl Hellas approaches this development with greater reservation, although it declares full compliance with the legal framework. "We have already steadily reduced prices on 578 private label products and absorb VAT on all fresh pork and beef until May 21, offering more than 40 items with a 13% reduction," notes a source from the company. "Even with the lifting of the measure from July 1, we will continue our measures to lighten the burden on Greek budgets with responsibility, consistency, transparency, and steady commitment to our mission."

The concern about how the situation in the market will evolve is not negligible. As sources from all three companies emphasize, the real picture of the impact on consumers will not be reflected immediately. Bazaar predicts that the consequences will not be visible before the end of summer: "Until August 31, we do not expect significant differentiations. From September onwards, we will have a clearer picture."

At the same time, the question remains whether the liberalization of margins will ultimately work in favor of competition or will further burden households. Businesses are called upon to balance between flexibility and social responsibility, at a time when high prices continue to pressure Greek consumers.

Foteini Apostolou

 

Source: FoodReporter May 13th 2025 #1405, page 2