Biznes Fakty
Egg prices: The new king of promotions
Analysts from WSB Merito and Grupa Blix suggest that prior to the holiday season, we should not anticipate significant hikes in egg prices or a sudden spike in demand driven by consumer panic over potential price increases. They do, however, observe considerable uncertainty among retail chains regarding this topic when analyzing promotions.
As reported by WSB Merito University and UCE Research, egg prices in February were 13.2 percent higher than they were a year earlier, while January saw an increase of 11.3 percent. Initial estimates also reveal that in March this year, egg prices in stores increased by 13.6 percent compared to the same month last year. In March, the average retail price of an egg in stores (considering both regular and promotional prices) slightly surpassed PLN 1 (in February it was PLN 0.99, and in January, PLN 0.96).
Factors Influencing Egg Price Increases
Dr. Robert Orpycha from WSB Merito University explains that the recent rise in egg prices can be attributed to multiple factors, primarily the high production costs stemming from increased feed prices, workforce shortages, rising employment costs, and escalating energy expenses. – The infrastructure utilized in the production process demands significant energy resources (such as lighting and heating), the costs of which have recently surged – he noted.
Orpycha further elaborates that avian influenza outbreaks and the culling of flocks also impact egg prices, limiting the number of hens and eggs available in the market. Additionally, during winter, the seasonal drop in egg supply contributes to price hikes, as hens produce fewer eggs during this period.
Prior to the holidays, Dr. Orpycha anticipates a further rise in egg prices. – We will undoubtedly continue to face cost pressures due to the aforementioned factors. Moreover, the demand for eggs significantly increases leading up to Easter due to our culinary traditions and holiday customs, which also contributes to price rises. Conversely, supply is not very adaptable, as it is not possible to rapidly increase egg production. Retailers often utilize the pre-holiday period to maximize their margins on essential products – he noted. He believes a slight price slowdown may occur after the holidays, but a substantial drop in prices in the near future seems improbable. As Piotr Biela from the Blix Group pointed out, the increases will be modest. – The year-on-year rise is considerable, yet prices have stabilized at a certain level. Currently, egg prices do not fluctuate drastically from month to month. Additionally, with the arrival of spring, the energy demand associated with production decreases, which will lower costs – he added.
Experts Discuss „Egg Panic”
Experts also weighed in on the anticipated pre-holiday „egg panic” predicted by some observers, which could lead to price increases. – I do not foresee that happening, but by analyzing promotional data, we already observe substantial uncertainty among retail chains concerning egg prices ahead of Easter. The largest chains have begun promoting eggs and featuring them prominently in their brochures, yet they do not disclose prices. Only information regarding the discount level is provided – Biela pointed out. This practice, he added, stems from the fact that chains typically make decisions about promotional offers 2-3 months in advance. – Since eggs are a perishable product, chains will only acquire them once the promotion is active. However, due to price uncertainty, it is preferable to inform customers about the discount level rather than the actual price – he added.
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Eggs as the Top Promotional Product
The expert also highlighted the pre-holiday sales strategy employed by retail chains. He believes that eggs are starting to surpass butter as the primary promotional product. Keeping prices undisclosed allows for a delay in competitors’ responses to promotions, which is a tactic in price wars. – I do not anticipate egg prices in Poland to rise in April 2025 compared to their current levels in March 2025. The year-on-year increase is expected to be between 10 and 15 percent – predicts Piotr Biela. Robert Orpych also does not foresee a rise in egg prices due to a sudden increase in demand. – We can expect heightened demand for eggs leading up to the holidays, but there will be no „egg panic.” Historical trends indicate that pre-holiday shopping behavior is predictable – he remarked.
Effects of the American Market Situation
Experts assert there is no need for concern regarding the effects of the American market situation, where there is currently an egg shortage due to avian influenza. The potential export of eggs to the U.S. faces numerous restrictions related to the delicacy of this product and its limited shelf life.
The only feasible option would involve costly air freight and additionally expensive specialized packaging. It would also be necessary to consider the regulations governing food trade in the U.S.
Thus, even if eggs were exported to the United States, the volume would be restricted and would not impact prices in Poland.
