According to a UCE Research report, oil prices have increased by about 30 percent annually in recent months. In addition, the number of ads will decrease. According to experts, the average price of a stick of oil may soon be PLN 10.
– Oil is the main product in the trade basket of Poles. Its prices are often compared by consumers and determine the choice of a given store for a large purchase. This is confirmed by the fact that oil is one of the most sought-after products in advertisements. Retail chains are well aware of this price sensitivity, which is why they have made this product a strategic element of the competitive struggle, said Dr. Krzysztof Luczak of Blix Group.
The price of oil changed in the same way in 2024
According to a report by Hiper-Com Poland, UCE Research and Blix Group, in the first four months of 2024 oil has become significantly cheaper than in 2023. In January, prices fell by about 14%. y/y, about 15% in February, more than 4% in March, and more than 10% in April.
In May 2024, compared to the previous one, the trend changed, as the prices rose and from the middle of the year the increase reached almost 30%. In August, the average growth reached 29.3%. y/y, up to 43.5% in hypermarkets, 41.4% in cash points, 26.5% in discount stores, 18.8% in supermarkets and 15% in convenience stores.
In September, the average increase was 30.1%. y/y, with 50.6% in cash and delivery, 41.4% in hypermarkets, 29.3% in supermarkets and 27.9% in discount stores. As for convenience chains, that is, small local stores, there was a slight decrease of 1.1% y/y during this period.
In turn, in October, prices increased by 32.2 percent compared to a year ago. And here: in cash&carry – 54.3%, discount stores – 32.7%, supermarkets – 27.8%, trade stores – 24.7%, hypermarkets – 17.8%.
Oil prices will rise in 2024
As mentioned in the report, in the period from January to the beginning of November, the average prices in three types of retail outlets, i.e. supermarkets (8.4 percent last year), cash chains (7.2 percent) and department stores (last year 5.5 percent) have increased. /y). However, declines were registered in two segments, namely hypermarkets (-7.7% year-on-year) and discount stores (-4.8% year-on-year).
– These are interesting data that show market segmentation. Supermarkets, cash-and-carry chains, and convenience stores target customers with more price flexibility, allowing them to charge higher prices. In turn, price drops in discount stores and hypermarkets can be attributed to intense price competition, which forces them to act aggressively to retain customers. At the same time, the latter format takes advantage of economies of scale, reducing unit margins in exchange for higher sales volume, said Julita Pryzmont of Hiper-Com Poland.
In turn, Krzysztof Luczak explains that the market has recently seen a decrease in milk production, which translates into a record price of dairy products on the European EEX exchange. – The decrease in supply in the market is a strong impetus for the increase in the price of oil, which we are currently observing, – he noted.
Analysts of the UCE Research company have observed that this trend is strengthening, and according to preliminary estimates, since mid-November of this year, annual prices have risen by an average of 31.8% this month.
– You can already find oil on the market for 10 PLN per cube. However, in most stores, the increase in the price of this basic product is due to the increase in the price of milk and energy. Taking into account the observed trends, the average price of PLN 10 per cube is already real in the first half of 2025 – noted Lucak.
Propaganda for oil is less and less
As UCE Research experts noted, compared to 2023, prices have increased and the number of advertising campaigns has decreased. In the period from January to early November of this year. in stores decreased by 13.8% compared to the year. oil advertising. As stated in the report. Their number decreased the most due to cash&carry chains (-24.8%), supermarkets (-23.4%) and hypermarkets (-17.4%). Convenience stores slightly reduced advertising – 0.4%. dr. Discount stores alone increased the number of promotions by 8.9%. dr.
– We are dealing with a significant increase in the price of products, which is of great importance from the point of view of consumer psychology. Running butter ads is getting more expensive every month, noted Piotr Biela of Blix Group. In his opinion, chains can raise prices more to be able to offer a similar number of promotions as last year, or to increase margins by keeping the price of butter low, but at the expense of fewer promotions.
– A better commercial effect is achieved by promoting less oil, but in a strong percentage. That way, the discount is better remembered by customers, Biela said.
In August, the number of promotions decreased by 33.7% compared to a year ago. In September, it was 25.2 percent. shares less y / y, and in October the decrease was 14.5%. In turn, according to calculations that include the first half of November, the number of advertisements has decreased by 41.1 percent. dr.
– These differences indicate that retail chains adapt their advertising policies more to current market conditions. The changes in recent months may have come as the chain prepares for the holiday season, where they are focused on maximizing margins, notes Prizmont.
According to Piotr Biela, advertising the price of oil in the commercial policy of retail chains is of strategic importance this year, because customers are ready to choose a store based on the price criteria of this product. – I expect the chains to offer strong oil promotions at key moments and this will be visible from the beginning of December with more attention in the middle of the month. At the same time, the regular price of oil will increase so that the chains will at least partially compensate for the reduced margin during promotions, the expert concluded.
The information presented in the report was obtained from the sources of the research and analytical agency Hiper-Com Poland and the analytical and research platform UCE RESEARCH and BLIX Group. For the purposes of the report, more than 3.1 thousand were tested. promotional campaigns and 4.6 thousand retail prices (regular and promotional). The survey covered all discount stores, hypermarkets, supermarkets, convenience stores and cash and delivery chains in the market.
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