Prices in grocery stores have risen by dozens of percent in recent years and the reasons are the same as for the overall rise in the cost of living in Estonia — high global market prices, climate-related issues affecting crop yields and rising wages, said Rainer Rohtla.

"If you look at Europe, price increases vary by country — 25 to 30 percent in most cases. In Estonia, it's around 45 percent. One factor is our distance from major producer countries, which affects import costs. Another is domestic energy price inflation, which has driven up the cost of local production," he added.

Responding to claims that retailers' greed is behind the price hikes, Rohtla said merchants are often blamed for all kinds of things. But even if a retailer wanted to "live well," Estonia's market economy doesn't allow it.

"Retailers' profits in recent years — excluding 2021, when the influx of pension money temporarily boosted consumption — have hovered around 2 percent. Coop's profit in 2024 was 1.6 percent. There's no sign of improvement this year. If you're expected to make all your investments and manage everything else with a 1.6 percent profit margin, I can't agree with the idea that retailers are doing well," Rohtla said.

He also rejected the notion that the number of supermarket locations operated by retail chains is to blame for higher prices.

"If you look at store space costs, they're about the same in Estonia as in Europe — around 6–8 percent of turnover. Coop has 320 stores across Estonia. If we closed 30 percent of them — about 90 stores — that would allow us to lower prices by about 2 percent. That's roughly equivalent to the VAT hike from 22 to 24 percent that took effect in July," Rohtla noted.

The steep rise in food prices has also raised questions about the reliability of official statistics. According to Rohtla, while statistics don't directly change the price of food in stores, the methodology used to calculate food prices as part of the consumer price index (CPI) could be revisited.

"If we measure food price increases using the same methods as before, the data collectors make subjective choices — what categories to include, which milk they prefer etc. Discounted products and promotions aren't included. In effect, we end up measuring the personal shopping habits of a few individuals rather than the average Estonian food basket," he explained.

Rohtla said the choices made by statisticians can significantly affect the end result. That's why retailers have agreed to share point-of-sale data from actual transactions with Statistics Estonia, which now plans to begin using that data.

"This won't lower food prices in stores, but it will reduce the impact food has on the growth of the CPI," he said.

As for the increasing number of discounts and promotional campaigns in stores, Rohtla said it's a result of years of near-hyperinflation in Estonia, with double-digit growth, while wage increases have lagged behind. Promotions and discounts mean that both retailers and producers have to give up a significant share of their profits.

"For basic food products, the markup — without any discounts or promotions — stays under 10 percent. Everyone takes a cut, including the producer. The producer wants to sell volume and if volume moves through promotions, they're willing to run a production line for two days, operate efficiently and offer a better price to the retailer," Rohtla said.

The Bank of Estonia said toward the start of October that its data suggests retailers' markups have reached 26 percent, while ten years ago they added 18 percent to purchase prices to cover costs and earn profit.

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