While much of the inflation results from producer prices being passed on to consumers, sometimes after a delay, the supermarkets generally say that the imminent entry of budget supermarket Lidl is not of major concern for them.

The Consumer Price Index rose by 11.3 percent on year to January, mostly the result of soaring energy prices but also with an input from food prices which has not gone unnoticed by consumers.

Kaimo Niitaru, selection and procurement director at Prisma Peremarket, said that: "It needs to be acknowledged that in recent months, many food products' prices have risen by an average of five to 10 percent, due to a rise in producer input prices."

Prisma says it has already felt the upward pressure on prices from producers as a result of rising input prices beginning last autumn, when a new period of price agreements were concluded with producers, while inflation has been seen in in all the most popular product categories, the supermarket says.  

Niitaru added that "Producers adjusted the prices of edible oils already in the summer to autumn of last year. The prices of bread and bread have risen by 5-10 percent in Prisma. In the case of minced meat, the price has risen by a couple of percent or so," adding that coffee, with a 25 percent price rise, still had not risen by as much in price as an end product as its raw material price had on the world market.

Meat has seen the least increase in price, Prisma says.

Rimi reports similar rates of inflation.

Spokesperson Katrin Bats said that rapeseed oil, for instance, ad risen by as much as 20-30 percent, while coffee saw inflation, albeit more recently, of as high as 30-40 percent.

At Rimi, eggs were up in price by 20 percent, milk and bread both by 10 percent, and minced meat by five percent.

Tiia Schapel, spokesperson for Maxima, says the retailer consciously keeps the prices of basic food products low.

However, some food prices have risen by an average of 5 percent, for instance butter, milk, domestic minced meat and ground coffee has risen, over the last four months. 

The supermarkets have as a result of the price rises had to scrap some discount campaigns.

Prisma gave up its short-term weekly campaigns recently, and is introducing longer-term discounts in important categories, Niitaru said, to offer security.

Meanwhile, Maxima says it is fixing the price of over 100 key, everyday, essential food products, while Rimi has bucked the trend by continuing its promotional campaigns unchanged, for instance every Friday on fruit and vegetables.

The long-awaited arrival of cut-price German-owned supermarket chain Lidly has not caused so much consternation for Maxima.

Tiia Schapel said: "The launch of the new company will certainly be of interest to customers, but we believe that our customers will prefer local products and local flavors that Lidl will probably not be able to offer."

"There is a widespread perception in the media and the public that when Lidl enters a new market, it causes lower food prices and offers extremely cheap prices. But who says Lidl is cheap? It is common knowledge that Lidl has had good prices when entering a new market, but very quickly they alter the level to that of other retailers, as has happened in Lithuania. In most cases, they have lower prices for unknown products from unknown manufacturers," she went on.

Exactly when Lidl will open is still unknown, but the company announced it had signed contracts with around 800 staff shortly before Christmas, meaning the first eight outlets are in principle ready.

The chain also had legal issues with Tallinn City Government over access to a planned Lasnamäe branch, as of last summer.

Kaimo Niitaru said that Prisma was not worried about the competition from Lidl wen it starts trading, saying that it, Prisma, will continue to strive to offer the best variety and calling some competition not a bad thing.

Katrin Bats at Rimi said that the supermarket chain would monitor all its competitors' price levels and make changes where necessary, adding that local producers recent price rises will not go on forever.

--

Follow ERR News on Facebook and Twitter and never miss an update!