The past year has not been easy for the food retail sector, said Noris Krūzītis, Executive Director of the Latvian Food Retailers Association.
He noted that although the pace of inflation has slowed, food prices are still showing an upward trend. This is influenced by rising raw material costs, challenging weather conditions, and other objective factors.
According to Krūzītis, Latvian consumers are highly sensitive to price changes and often choose the lowest-price option. As a result, a strong focus on low-price offers and promotions continues this year.
At the same time, the Latvian market is relatively small, with lower purchasing power compared to much of Western Europe, which limits the entry of new retailers. However, competition among existing players remains very strong, Krūzītis said.
He emphasized that this is driven both by the presence of the three largest Baltic-level retailers and several local chains. This competition is visible daily in aggressive price offers and frequent promotions.
This year, the sector was further influenced by the “Low Price Basket” initiative,
developed in cooperation with the Ministry of Economics. In this initiative, retailers, producers, and suppliers agreed to set the lowest possible prices for a basic basket of essential products. Krūzītis noted that this helps society at a time when the effects of inflation are still being felt, while at the same time intensifying competition between industry players.
He also pointed out that the sector continues to develop, with significant attention being paid to improving infrastructure and customer service quality. Self-checkout has become a standard, and digital solutions are increasingly being introduced – including artificial intelligence, which helps manage stock levels and expiration dates, as well as optimize deliveries and orders.
“What is concerning is that the sector is being burdened with more and more requirements and new regulations, which mean growing administrative workload and costs for businesses,” Krūzītis said.
He stressed that while consumers and the government expect the lowest possible prices, retailers must spend time and money to comply with new requirements. For example, while industry players support environmentally friendly practices, they undeniably face challenges in implementing the Green Deal – requirements for reducing food waste, ensuring traceability from production to store shelves, cutting packaging, and using environmentally friendly materials are becoming increasingly strict. This means additional investments and new innovations from the sector.
The Latvian Food Retailers Association was established in 2010 with the goal of promoting the development of the food retail sector and addressing issues specifically important to food retailers. Its members include Narvesen, Rimi, Aibe, and Top!.
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