Prices are falling! Bad news for bakers: Inflation is putting pressure on bread!

Prices are falling! Bad news for bakers: Inflation is putting pressure on bread!

Bread prices in Germany concern consumers and bakers alike. While the baker Thomas Göing in Hanover has reduced the prices for many of his products, the general price trend in the industry remains stagnantly high. Göing, which offers around 60 items, has reduced the price of its 750 gram regular bread from 3.50 euros to 2.95 euros, which corresponds to a price reduction of 15.7 percent. However, an article by Capital points out the paradoxical price increases in many bakeries, which often cannot be explained by higher production costs.

The price dilemma is further compounded by the opposing trends of supermarkets lowering their prices, while bakers often offer their items at higher prices. The discrepancy between these price movements creates a lack of understanding among consumers.

Price increases despite lower raw material prices

An analysis by ZDF shows that bread prices in Germany continue to rise, although grain and energy prices have fallen. The consumer price index for bread and rolls has reached a record high. Stefan Blum, operator of a grain mill in Munich, explains that the lower grain prices do not immediately lead to lower flour prices, as the bakeries' purchases often took place some time ago. These delays mean that low raw material prices do not immediately reach end consumers.

In addition, it should be noted that the price increases for bread are not solely due to the raw materials. Factors such as rising energy costs, personnel costs and rents also play a crucial role. Heinrich Traublinger, an experienced master baker and confectioner, reports that energy costs have increased many times over since the corona pandemic and the effects of the Ukraine war. These costs now account for between 7 and 10 percent of sales, which puts a heavy burden on bakeries.

Outlook on pricing policy

The linking of old contracts means that bakeries have to struggle with high energy costs despite lower raw material prices. Christian Hörger, Managing Director of Lieken GmbH, calls for more transparency and understanding of the complex cost structures in the industry. He expects that bread prices will not fall in the near future as they were already too low and production costs remain high.

The situation illustrates how different market conditions and economic influences affect the prices of basic foods. Despite the many price regulation measures and the efforts of individual bakers, consumers should continue to expect high bread prices, even if raw material prices fall.