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Poland: Biedronka's pricing policy prevents food inflation in Poland by 3 percentage points

Updated: Mar 26, 2023

Discount Retail Chain Biedronka Poland (owned by the Portuguese Jeronimo Martins) CEO Luís Araújo talked about the pricing strategy of the chain, which treats maintaining the cheapest position on the market as the main priority. The manager explained what methodology is used when comparing baskets and expressed the assumption that if Biedronka followed market prices, the increase in food prices in Poland could be even more than 3 percentage points higher.

One of the projects recently implemented by the Biedronka chain was the launch of an e-commerce website with an offer of industrial products. As Luís Araújo, CEO of Biedronka, emphasizes, it was a natural step on the way to the development of the network, because these product categories are included in the stationary offer. However, they are available mainly as part of in-out promotional campaigns and are only a supplement to the food offer, they are also to contribute to the acquisition of additional customers. However, in the online store they are constantly available.

The manager pointed out that the project of an e-store with a non-food offer is very fresh, it still needs to be refined, including expanding the assortment and developing stable supply channels.

Luís Araújo: Low price is sacred

Luís Araújo emphasized the importance of low price policy in the strategy of the Biedronka chain. There is no greater sanctity than low prices. It is price perception that drives sales, which is why maintaining the position of the cheapest chain on the Polish market is our main priority. That is why every week we study prices in the market, follow our indices and at regular meetings with management we present and discuss detailed reports," he revealed.

The manager pointed out that Biedronka very closely monitors the price gap and makes sure that the increase in prices on the shelves is correspondingly lower than the inflation of food prices on the Polish market.

"Currently, after February 2023, the price gap remains at the same level as always, i.e. we have prices on average more than two percentage points lower than market prices. And that's not going to change. The methodology for comparing shopping baskets is important. In our case, we always compare our lowest price with the market price, if in a given week we have, for example, a 2+1 promotion, we include a promotional price in the basket, not a regular one. What matters is how much the consumer will actually pay for the goods," Araújo explained.

"Also, the prices offered in promotions available to holders of the Moja Biedronka card are included in our statements, which is justified because we have already issued over 15 million cards and they are massively used", he added.

Thanks to Biedronka, the price is slightly lower

"Our policy of keeping prices below market levels has contributed to some extent to limiting food price inflation in Poland. It is difficult to assess exactly how big this contribution is, but taking into account the size of our share in the food market, it can be assumed that if we followed the market in this respect, the increase in food prices could be at least three percentage points higher," concluded Luís Araújo.

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