I lived in Austria and in Germany and it's 100% true, prices in supermarkets are significantly higher in Austria even for products produced in Austria.
The reasons IMO are:
* less price sensitivity: German people are extremely price sensitive, they discuss and compare prices all the time. In Austria people care way less about this on average. Supermarkets take advantage
* higher logistics costs: population density in Austria is less than in Germany. Furthermore, many supermarkets are located in areas hard to reach like mountain areas. Higher logistic costs translate to higher prices
* VAT is slightly higher in Austria
* unqualified labor that works in supermarkets and logistics makes slightly more money in Austria than in Germany
* there indeed is a higher supermarket tensity in Austria than in Germany. Supermarkets of the same company appear more appealing in Austria than in Germany: nicer presentation of food, cleaner, way less people in the line waiting. All this makes them more expensive
For all these reasons mentioned above prices are higher. I argue it's mostly related to consumer choices. If they would care so much about prices and so little about esthetics as in Germany then prices would come down. If people would start to walk the extra mile for the cheaper supermarket prices would come down.
Germany is a car country: most ways to work, gym, etc in the average German city are done by car. Makes it easy to drive the extra mile to the cheapest supermarket.
Austria is much better for using public transport or the bike. In this case you won't make the extra way to stop at the cheapest grocery. And in the areas in Austria where people use cars population density is so low that not a lot of competition between supermarkets exists
Not true. Most people in germany have a supermarket in walking distance to their home and the bime infrastructe is often critizised but actually good compared to most cou tries
even if supermarkets are within walking distance, if Germans are getting in their cars regularly for other reasons, that could change their supermarket shopping behavior in favor of more distant store with cheaper prices.
exactly. While living in Germany I had an expensive supermarket in walking distance, but I'd almost never go there because I used the car to go to work and stopped at a cheaper one on the way back. In Austria in the cities it's almost impossible to go by car to work because parking is incredibly expensive so most people use public transport or bikes
You should add conglomerates. In Austria, the grocery market is effectively dominated by 3 companies. They rarely compete directly, i.e., by having stores next to each other.
The same in the Netherlands vs Germany. I live on the border. And often German grocery stores have (organic) vegetables, produced in the Netherlands, for much less than these same vegetables cost in the Netherlands.
Part is VAT, which is higher in the Netherlands, but I'm confident most is due to the fact Dutch people will simply pay more than Germans.
This goes beyond just groceries. I've lived in a few countries that vary in population from hundreds of millions to just a few million and the impact of scale is very noticeable.
It's very intuitive, but the actual impact is eye opening. I've found that for almost all products and services, the size of the US results in far more companies offering said product/service, which results in a lot more competition and better prices.
You see it not just across consumer items, but things like financial services.
Today at Aldi I saw a pudding [0] which I was about to grab, until I saw the price. 1.88€ for 500ml. My first thought was that I'm paying 1.90 for a VPS which gives me a static IPv4, 1 vCore, 2GB RAM, 20GB SSD and unlimited bandwidth (40 TB unthrottled, 100mbit/s throttled). How does this even relate in terms of value? I would have expected something below 80ct, but some of the prices which products have, have become really absurd. It's as if they're just doing a "let's set it to this price and see if it sticks".
Even funnier was the fact that they now have Christmas products on the shelves, "Wintertraum Lebkuchen". Then again, I read a Reddit post some months ago which explained why they're doing this (might as well put it there instead of into storage).
As an Austrian dev and consumer who has closely followed this throughout the year: it's soo frustrating to see how we're ripped off for no good reason, but nothing changes and nobody cares.
Hats off to Mario for sticking with the topic and not losing his mind over this infuriating madness.
They would care of projects like this generated broad awareness and organized revolt from consumers.
Companies need adults in the room to keep them from behaving badly. This operating under the observation that they behave badly when not being watched, so a thesis to be tested more than an assertion of fact.
At a minimum they arguably behave worse when there are no consequences, hence inflation becoming air cover to raise prices when prices weren’t being raised before as there was no “good reason” for them to go up.
I love this project. “Index data” projects like this seem ripe as a category, especially with AI and Ml systems providing ready observability on changes and trends.
The question is how to get enough conclusions and salient observations that spur people to the social science outrage factor levels so that they take action.
Or perhaps we should just accept that companies will use these technologies to optimize everything against consumers and not deploy them in counterinsurgency resistance-style whitehat fashion.
Is it possible for somebody to open up a shop that buys from German distributors at up to a 40% discount? Then you wouldn’t need a mass outrage movement to solve the problem.
I would suggest that AI tech will open up more arbitrage opportunities for retailers as their price strategies come under pressure from inexpensive monitoring and reporting. Already I’ve worked on prototypes where shopping lists are fed into the system and the retailer that would give you the lowest price nearby is suggested.
Imagine the optimization possibilities where you have shared borders like you’re talking about, or where digital intelligence can be injected to optimize purchase prices among consumers for larger ticket or recurring items.
not austrian but I live in austria. at first I was like, okay, higher inflation post covid like everything else, but now at this point where I see prices still rising, it's starting to just feel like a blatant cash grab
HOWEVER, i will add - what do people expect when you give everyone 500 extra EUR a year via this klima bonus? how is that supposed to reduce inflation? my guess is the grocery chains are leaning into this
It's a nice little scheme that incentivizes saving CO2.
There's a CO2 tax on gas and other fossil fuels, part of this tax revenue is then, once a year, distributed back to taxpayers. The idea is that people who don't consume a lot of fossil fuel earn money through this scheme, while those who user above average pay more than what they get back.
Of course this is not well communicated from the gov and random cash appearing in everyone's account can accelerate the already high inflation.
It looks like it's designed so that people who live in the country get more, not necessarily those who consume more. Within a region, everyone gets the same amount. So within a region, those who consume less win, and those who consume more lose.
> it's soo frustrating to see how we're ripped off for no good reason
It isn’t for no good reason, the prices are higher for the exact same reason they are lower in Germany: the price set allows the company to make the most money.
Whether prices are high or low, the reason is always exactly the same: it makes the most money.
We recently had an Indian LinkedIn nutrition influencer literally reading the listed nutrition information on the back of a Bournvita* (a malt chocolate which you mix into milk) - dude got DMCA-ed and nearly sued. These companies get really worked up when you start affecting their bottomline.
*Might have been some other similar milk ~addictive~ (meant to say “additive” but the original version also works) for kids.
If it's like the UK, there is so much "shrinkflation" (reduction in product size [and cheapening of ingredients]) that prices comparison is going to need per gram pricing. Identical looking packs now have extra air gaps: inflated chocolate bar wrappers, ice-cream cones with a 1cm gap below the lid, butter cartons have a recessed base, packages that formerly had straight sides now taper, etc. ... lots of these "tricks" already existed but they're being used more and more.
All the supermarkets have full inventory databases, they could send you an updated price list of every product every five minutes at basically no cost. This smacks of a legislature don't/won't seek advice from experts. It's a start I suppose.
> that prices comparison is going to need per gram pricing
Not entirely sure what you mean here, but we do have per gram pricing requirements (expressed in £/KG).
EDIT: oh you mean that shrinkflation is so bad that £/gram will make more sense. Hah yeah
The trouble is that grocers have figured out that if you fool the population in to using a 'loyalty' card, you can make everything a 'promotional price' and avoid the per-unit labelling requirements. They just show the £/KG price of the higher price. So now consumers can't easily compare. [0]
All of this can be avoided by just shopping at e.g. Aldi and Lidl, but I would not be surprised if even they succumb to the temptation of a loyalty-card-only pricing very soon. (Though they too have partaken in shrinkflation)
> The trouble is that grocers have figured out that if you fool the population in to using a 'loyalty' card, you can make everything a 'promotional price' and avoid the per-unit labelling requirements. They just show the £/KG price of the higher price. So now consumers can't easily compare. [0]
That is illegal in the Netherlands: You must advertise with the normal price. You can display the "promotional price" but it cannot be your main price. What they usually try is adding a "25% off with card" option next to it or with a second price card. You however CAN NOT be denied the discount in any way even if you do not subscribe! This is less easy to do online but offline the shop will have to give you the discount.
There is one exception: b2b.
I complained about this when a liquor chain (gall & gall) started using their "card holder" prices as the regular prices on the cards and displayed the regular ones almost invisible (black text on blue background ...). They refused to provide the discount price to non card holders. Complained to the regulatory institution and got back to me that they were already looking into it. No fine was charged but the practice stopped after a few weeks.
edit: on a more HN note; if you use the apps for the discount of the stores they usually have an agree notice which includes, among other things, you can be tracked in the shop with the app. Never be logged in to those while in the shop (or ever).
It seems like we have all of the tools necessary to take a picture of a segment of store shelf and have the price data extracted from the photo, associated with the item itself, cross referenced, etc, and then show you an overlay with the best deals highlighted.
I shop there 2-3 times a week and wouldn't really say "rapidly". Or if they do, the swings aren't big enough for me to notice.
Though looking at their site, I think they are partaking in the old "raise prices for a short period then show them as a 'sale' price" nonsense. But it only seems to be £0.10-£0.30 and the higher prices aren't even that offensive (yes I have a soft spot for Aldi :D).
I would like to see companies forced to show the period that the higher price was charged for.
In the UK the supermarkets (I assume they have to by law) quote the weight of contents of a single unit of product (which is supposed to be total weight - packaging weight), so you could analyse this quite rapidly.
They don't, some items are per unit, which is a way that avoid comparisons for fruit. In [my local] Tesco they even took away the manual scales now, making comparison across 5 different types of apples, say, much harder. Good mental-arithmetic practice.
And this is why scraping is under technical and legal attack. To maintain their panopticon, where they see all, while you get only a pinhole view of, in this case, the economy.
Scraping is huge business for people who don’t have your best interests in mind, too. There are many businesses built on the idea of gathering as much of people’s data as they can find in the public internet and selling it to anyone willing to pay.
Contrary to what many people thing, Facebook, Google, and other companies do not sell your data! They are ad companies that use their private data to target ads, but they aren’t selling it to 3rd parties likely many people have been led to believe. This has created a market opening for nefarious companies to scrape these websites, compile the data, and sell it to everyone from police to governments to spammers.
I’m not saying there’s a right answer to regulation, but it’s incorrect to say that scrapers are always the good actors championing the public’s best interests.
I haven't seen one in a while, but this sort of thing used to go off the rails on amazon. I tried to buy a 10 trillion dollar chair--presumably algorithmically priced--but the checkout process broke before I could see what the CC company would say about it.
Scraping them with high fidelity and frequency, and then selling that data commercially... and then buying that data from a provider and updating your prices using them...
Probably isn't something a company with potential monopoly concerns (read: Walmart et al.) would want be be overly open about.
And cameras are used by stalkers as well. But when a prolific photographer, growing rich off their trade, tries to control what others are allowed to photograph, I won't assume they're doing it out of concern for my well-being.
I don't want Google or Facebook to have my data either, yet they've done their best to gather everyone's with various trackers, not just data posted voluntarily to their platforms. They don't have to sell it - they are the threat too.
>Facebook, Google, and other companies do not sell your data!
this does not excuse the pervasive tracking that occurs by "we collect for internal purposes only" vs "we sell to anyone". an invasion of privacy is still an invasion of privacy whether they do it for their own fetish purposes or distributing it to the public.
Fellow Austrian here. Nice price comparison project, but the elephant in the room is that grocery store prices in Germany are 20-40% lower for the same product. Explanation from the supermarket chains are shady at best (more stores per capita compared to Germany, they are forced to buy from more expensive Austrian distributors etc). I heard similar things from Belgium (higher prices than in France)
My point is: we need a Europe-wide price comparison if the situation should change.
Austria's real problem is that it's a bad business environment with high taxes and tons of regulation. It means that there are only a few players in that space that ultimately dominate it. Small companies could not even enter that space because the regulation does not give them any space to innovate (for instance free selection of products, other opening times).
Smaller countries (by economy or by population) tend to have protectionist rules, otherwise they simply get absorbed by their (bigger) neighbouring countries. Historically, those protections weren't that much of an issue, but as bigger countries continue optimizing their systems at huge scale, smaller countries can't keep up (offer the same price/quality).
For example in the US, when TikTok became too popular, politicians quickly reacted to avoid having a major social network that was backed by a foreign country. Legitimately in the name of consumer protection, of course, but clearly also other interests. Funny how the US very selectively protects its consumers.
It's not great for the consumer (less competition/freedom), but ultimately it's about protecting local expertise to avoid being fully dependant on another region (obviously, sometimes this gets abused). Losing local expertise increases the brain-drain, since any skilled person will know that they won't get many good job options locally.
I live in Quebec/Canada, which has many rules in the name of consumer protection, but usually it's really about protecting local businesses without going against free trade agreements. I'm not a fan of isolationism, but winner-take-all types of scenarios, where no one can compete against foreign semi-monopolies hurt us in the long term. It's hard to find a good balance. An interesting take, in Quebec and in the EU, is seeing many laws that only apply above a certain scale.
> For example in the US, when TikTok became too popular, politicians quickly reacted to avoid having a major social network that was backed by a foreign country. Legitimately in the name of consumer protection, of course, but clearly also other interests. Funny how the US very selectively protects its consumers.
Instead of the US three-letter agencies having everyone's location, friend groups, bio-metric info, personal photos, etc.. via Instagram, Twitter, Facebook, etc.. ByteDance was getting all the data and sharing with the CCP.
So Trump and others tried to ban it or make ByteDance sell the app to a US company.
Honestly, I was kind of okay with that. As much as I hate western governments spying on us, I hate that fascist and communist countries like China, NK, and many places in the middle east literally act to ban, imprison or 'disappear' millions of it's own people that have tried to speak again the party lines.
Maybe one day even the western countries will do this. Governments are hands down the leading cause of death in the world.
More generally, the EU has problems with market efficiency in general. The law allowing mail-order businesses to refuse to sell across “state lines” means markets are very atomized and dominated by one or two players who, spoiler, don’t really compete aggressively on pricing.
The idea of Newegg refusing to sell to me because I don’t live in California is insane from an American perspective but that’s what the EU has to live with - mindfactory, komplett, etc will not ship across state lines. It’s a single market in name only, as far as distribution and sales. In practice the only “single market” is customs and currency, and even then there’s edge cases.
It is a very weird overall market where you have these strong consumer protections but also backed by low competitiveness in retail and distribution which leaves margins for supply chains to accommodate this.
Austria in particular is really bad here. If you send commercially packages into Austria you need to register with the recycling system, license packaging and go to a notary to declare a proxy for packaging. There is so much crazy protectionism going on that the single market is effectively no longer free.
Well if they refuse you can't really force them, they might have legitimate reasons to turn clients away but I agree that this is not efficient and since you cited mindfactory I add that in Italy in the hardware business there have been many popular companies with competitive prices that were shut down by authorities for tax evasion.
It's obviously not as conducive to business as in the US. However, one advantage I can think of is that registering a new business in Canada takes only about a day.
I should add that I don't know much about regulations in either country. I would love to start a similar opensource project for Canada. I am very curious about what we might find.
we know of the price gouging and all oligopolistic behaviour in Canada, but there is no political will to do anything. big business and government are buddies.
We've seen some concentration over the last 30 years or so. It hasn't been about regulations, though. In actually, the remaining companies first aggressively extended their selections of products and lowered prices, only to backtrack significantly on both, as the competition was gone, with about 2 big conglomerates remaining.
It is indeed true that we have a lot of supermarkets in Austria, which might make logistics more expensive. But nobody ever explained why we need so many supermarkets from just 3 chains (REWE, Spar, Hofer - everything else is neglectedable). My only explanation is that the big 3 want to squat every possible spot to keep competition out.
The other argument from the chains is that they are forced to buy brand products from Austrian distributors that are more expensive than German ones due to lack of volume (think of making a wholesale contract for M&Ms with Mars Germany, not Mars Austria). Again shady argument, because they could have sued against these practices years ago.
Germany has the luck of being a big country with scale effects and healthy grocery store competition.
Related, I’m currently in Greece and the price of locally produced peaches is higher here than the price of the same Greek-produced peaches is in Romania (from where I’m from). Noticed it today and it blew my mind, not sure how the people of Greece put up with this bs (the price of gasoline is also way higher).
These Greek peaches are indeed bigger, as in, apple-big, but not sure that that “quality” can justify the price difference (they’re twice as expensive in Greece). And the smaller peaches taste better anyway, like it’s usually the case with fruits and “bigness”.
It’s crazy how many interesting things you can find when scraping prices of services and products online (most of the time tricks that aim to screw the customer). I think it’s time the EU legislates that companies provide pricing data via a standardised API so that we can all benefit, and so these tricks are deterred.
I’ve actually built a scraper for Disney World holidays[1] and found some interesting hacks to get cheaper deals, for example purchasing separate hotel tickets lasting a part of the full stay. I plan to make a holiday inflation index out of this eventually.
This was a really interesting read! I find it so tiresome trying to evaluate food prices and optimize grocery shopping to optimize [time and money spent], and a large data set like this could make it much easier. Is anyone aware of a similar price analysis for the United States?
Another way to go about it is to check the profit margins of your sellers. In the US, all the big companies are publicly listed, so as long as you shop at Costco/Walmart/Target/Kroger/Albertsons/etc, you know you will not be paying more than a couple percent above what it costs the retailer to sell to you.
Obviously, individual items within the store have different margins, but almost all unprepared / expiring foods will be at the lowest margins.
Winco/Aldi/Lidl are other grocery businesses where it is known the markup is extremely minimal.
I'm not sure how other mastodon servers look, but this one is light years ahead of Twitter in terms of readability. I hope someone eventually writes a tell-all book about exactly what was wrong with that company and its approach to product design.
Different incentives. A publically traded corporation with thousands of workers trying to grow in perpetuity, has different goals than a community project. While the former has more resources, the latter is more mission driven.
That's default Mastodon styling "dark mode" and single-pane.
There's also a multi-pane "advanced view", similar to Tweetdeck, I'm told.
The dark mode is preferred by some but is absolute hell to read on an e-ink device. I have an outstanding issue request on that, as the theme cannot be changed if you're not logged in to a given instance.
>it shows the power of smart, tech-capable citizens
Consumers in Austria who travel abroad/to Germany often, already knew they were getting scammed for a long time now, but couldn't prove it and now they can, so the more important question is what will come out of it, as the data shows the big retailers clearly cooperating on price fixing.
My guess, nothing, as the government regulators who are supposed to watch over this, will find nothing wrong, as they're already bought and paid for to go work as lobbyists or "consultants" for these retailers once their stint in politics is over.
Why do I think this? Well, about 6 years ago, the 3 big telecom operators in Austria raised the prices together at the exact same time, and the government body in charge of overseeing these things said they have no proof that the 3 operators colluded together for price fixing and it could just be a coincidence, case closed.
The country is so corrupt, it's rotten to the core. As a consumer and taxpayer you are being legally fleeced form every direction with the blessing of the government, but this is probably true in many other countries.
> as the data shows the big retailers clearly cooperating on price fixing.
The data does not clearly show that at all. It shows the expected result of inflation in a competitive market.
When Company A decides that it's time to raise prices on Product B due to inflation (maybe their wholesale price went up), Company C, being under the same market pressures to raise prices, also raises their price but, because they still want to be competitive, they don't raise them beyond Company A. Reacting to the market isn't collusion, anti-competitive or anti-consumer. If you just reverse the direction the prices are going, it seems a lot less sinister and it's still the exact same inputs/outputs.
The whole thread is made of points like that, especially the "asymmetrical information warfare" bit. He's scraping the websites for this data, right? Obviously that information is available at home. Moreover, the situation has actually dramatically improved because of the internet. You can now put together a cart on two different websites and go to the cheaper store if you'd like. Try doing that twenty years ago. I used to have to read the weekly ad to know these things, now I can just look online.
The _only_ point that's being made is that Austrian prices are a bit higher than other nations and, for some reason, he thinks it's because the companies are conspiring in some way and not that it's, for some reason, more expensive for those companies to operate in Austria. That seems like the obvious solution to me since they appear to have a competitive market with a few major players.
> Well, about 6 years ago, the 3 big telecom operators in Austria raised the prices together at the exact same time, and the government body in charge of overseeing these things said they have no proof that the 3 operators colluded together for price fixing and it could just be a coincidence, case closed.
Years later they couldn't find any direct evidence but providers were subsequently only not-guilty if they could show long term planning. With a duo- or tripoly it's not hard to have fix your prices together. This especially happens in the high-entry cost markets like telecom.
Well the person I replied to makes a very specific claim. That prices were raised 6 years ago by all operators at the same time and that the regulator did not fault them. Neither can I find evidence of that price hike, nor can I find a statement by the regulator.
If we are talking about that story, that is 12 years ago, not 6 and relates to a different fee structure, not raising of prices. So while I agree that this is a terrible development, I'm not sure that's what we're discussing here. More specifically after 2011 there was a huge downwards pressure on the market coming from increasing competition from virtual operators with decreasing prices.
> relates to a different fee structure, not raising of prices
Are you really arguing that all operators introduced a yearly fee of exactly the same amount, and in a very short period of time, was somehow perfectly balanced out by a drop in monthly rates, and on average nobody ended up paying more?
Yes, Austria in general has a very healthy competitive market for mobile phone plans, but this particular move just looks extremely coordinated.
> Are you really arguing that all operators introduced a yearly fee of exactly the same amount, and in a very short period of time, was somehow perfectly balanced out by a drop in monthly rates, and on average nobody ended up paying more?
I'm arguing that after 2011 when the first operator introduced those fees, the cost of mobile phone plans decreased for many years until around 2019. It's also that not all operators introduced those fees and not all operators did at the same time. The main reason why many operators started charging with this fee structure is pretty obvious: it makes the monthly cost appear lower than it is. It's a form of sanctioned price in-transparency.
//EDIT: the main reason for the introduction of that Servicepauschale was that for a while internet service providers where required to participate in the now illegal "Vorratesdatenspeicherung". The pauschale was generally understood to cover the cost of the infrastructure for it.
If the retail stores are price fixing then why are their stock prices down so much this year? Their investors are getting savaged. What did they do with all this extra cashflow?
My guess is because in Germany they're taking a loss due to actual competition, and making it up in other countries like Austria where they rake in higher profits than in their home-land.
Matter of fact is that crossing the border to Germany will make your shopping 30+% cheaper. Make of that what you will, but it’s the same companies (Rewe, Aldi, Lidl).
Literally no possible way Austrian grocery stores are pulling in 43% margins. That's more than Apple makes. I can't tell if this price fixing talk is the product of overactive imaginations or a gigantic lack of imagination.
If grocery stores were suddenly capable of 43 percent margins there would be absolute pandemonium in the markets and stocks would skyrocket. Retailers in every industry would be switching to food sales en masse. People would be flying food in by aircraft. You see just the opposite. Food retailers' stocks are down a lot year-to-date.
There is a lot of cross border shopping, both online and offline, so, yeah. You seem to severely underestimate shipping costs though. For perishable goods, of which you buy max €30 every few days, you’d pay at least €10 express shipping fees. And then you have no control over which pieces you‘ll get (hard avocados & soft apples). Also, shipping heavy stuff like sparkling water crates is obviously prohibitively expensive.
Shipping costs are price fixing now? We're talking about the brain dead price fixing theory. Stay on topic. I'm not the one underestimating shipping costs. The theorists are.
A retailer can ship way cheaper from Germany to Austria than an online retailer using postal service. The price difference is not shipping costs for retailers, but postal shipping costs make cross border shopping often uneconomic for customers.
I do this in Chicago ... Every time I could shop at Jewel or Mariano's I instead cross the border into Aldi and get similar stuff with less choices for 30% off!
I never said nobody tried price fixing in Germany, but when it comes to consumer pricing in retail, my take is that Germany has a bigger market with more competition meaning the retailers can stomach increased competition and lower margins making it up in sheer volume. Smaller countries like Austria have much less competition, less volume sales, meaning more space for monopolies to form to charge higher prices.
This is indeed my question as well. I am Czech. We are right next to Germany. Theoretically, this is one huge Common Market. In practice, many mass-produced things are much more expensive in Czechia than in Germany, including food.
I suspect that the language barrier is still real. But then again, German-speaking Austria experiences the same thing.
I wish we had a common European delivery service, like the US has US Post or DHL, with the same cost structure across the entire continent. We don't, a package from Spain to Czechia is much more expensive than within either Spain or Czechia.
A common European delivery service would give foreign e-shops a massive competitive edge. Suddenly, it would be more efficient to buy cheaper things in Slovenia or Bulgaria.
You think villains such as Macron would allow actual competition? They fucked half the continent trucking companies to enrich their own. So much for unity
In Germany? It gets superceded by more ethnic retailers importing cheap produce from their relatively poorer origin countries, and offering actual competitive prices against the likes of Aldi and Lidl.
I've noticed a surge in Germans going to Turkish/Arabic food stores in the last few years.
Common market means that Apple can't charge for iCloud to Sweden more expensively (before tax) than what they charge to Spain, it doesn't mean that goods made in one country of the union can't have way different pricing in another based on shipping, VAT, taxes, labor, supply/demand, or straight up price gouging.
I'm talking about laws and enforcement of laws against anti-competitive practices like price fixing. Either enforcement is wildly different and there's a shitload of money to be made by undercutting the Austrian grocery cartel or the price fixing theory is just a socialist talking point.
but in order to do that for groceries you have to open shops in austria which makes it much more difficult compared to products that can be sold online.
How hard is it to sell food out of a flower shop? Out of a candy store? A toy store? A gift shop? A coffee shop? A hardware store? There are retailers all over the country that could start selling food in no time flat. Starbucks is part of the Austrian grocery cartel too? And there's still no evidence that authorities are turning a blind eye to price fixing other than 'price go up.'
Ask an Austrian hardware store owner why he doesn't sell food when he can supposedly undercut grocery stores and still make 5% profit on every item sold. I bet you anything he'll say that's bs.
i am not sure i understand what your argument is, or what you think mine is.
your last sentence suggests that you don't believe that anyone can just undercut the big supermarket chains in austria. which is what i also don't believe.
but your first sentence is saying something different, so that has me confused.
What will happen if a hardware store starts selling bread? Austrian grocery cartel thugs will show up and break his legs? Please explain in detail why you believe that coffee shops cannot sell bread without a multi-year planning and approval process.
It's bs that anyone not in the supposed cartel can suddenly make huge profits on food by undercutting. Gross margins on food are almost certainly very low. THERE IS NO CARTEL. There is no room to undercut. There is no evidence of illegal price fixing other than price go up. The only cartel is the Austrian government which is the cause of the price increases--not via lack of enforcement of laws but from carrying out their policies as written. This is inconvenient to the socialist talking point about corporations fixing the price of bread with impunity.
first of all, i agree with you. THERE IS NO CARTEL. there is no need to shout. the cartel is not the problem. aldi from germany successfully entered the market in austria with their hofer chain, and lidl is a german supermarket chain too.
but i also do not agree with you that it would be trivial to sell food anywhere.
brand protection laws here (i found a source for germany, but i believe that this should be EU wide, otherwise it would be in violation of EU laws) do not allow you to sell a branded product without the permission of the brand owner.
so in order to sell something you have to negotiate with the brand. if you are a small shop you will not get the same volume prices as the big chains because you have no bargaining power. and if you already sell something else you will have to convince them that doing that combining that is a good idea. (i also think that you may need a license to sell food alongside other products, which may be denied. you can't just sell everything anywhere). the brands may also not be happy that you undercut the large chains they sell to as it may push them to demand lower prices from the brand in order to compete.
i also found one article that claims that "Territorial Supply Constraints" would allow brands to segment the EU along the internal borders and demand different prices per region.
it looks like that may be the real problem.
and while it may be possible to buy the products from a third party within the EU, doing so may may be difficult at scale and make it more difficult to undercut prices. and also the complicated legal landscape risks costly lawsuits, even if you would win.
why aren't the existing german chains in austria undercutting others? probably because they buy directly from the brand and so the brand can dictate where they sell.
Your bargaining power is that there are a dozen other food suppliers and tens of thousands of other common food items you could sell instead. No store is going to cry and go bankrupt because they can't sell Ding Dongs. Also, there are chains of hardware stores, chains of coffee shops, chains of everything which have additional bargaining power. And if the selling price is so high then everyone is going to be eager to push as much through the pipe as possible while the getting is good.
>the brands may also not be happy
Too bad. There is no shortage of food brands. This is not North Korea we're talking about.
>why aren't the existing german chains in austria undercutting others?
Probably because to do so would mean giving up all profit. That may in fact be illegal predatory pricing--using their position in the market to squeeze out less solvent competitors.
i think aldi is known for not selling otherwise well known brands. but from my memory hofer in austria is selling way more common brands than aldi in germany.
the discounters are known for selling brand products under a different label. i guess the brands go along with that because that way their brands higher prices elsewhere are not undercut because consumers don't recognize that it is the same product. in fact at least in the past brands dictated the retail price for their products, and discounters created house brands because of that.
that's why you don't see many otherwise well known brands in their shops. but from my memory hofer in austria is selling way more common brands under their original label than aldi in germany. (i could not find much data on this though, so this is a very subjective impression. i also haven't been shopping in germany for decades. according to wikipedia, aldi (south) has common brand products from 11 companies, whereas hofer has 10% of their 1000 products with common brands. and many of those are austrian brands. ok, i just found an article where aldi south also claims 90% own brands, but i guess in both cases that's not an exact number, so that's not very helpful)
so it seems austrians have a stronger local brand loyalty.
why are there so many brands that are not shared by both?
i guess because austrians want products sourced in austria.
this is also true in business. austrian companies prefer to only do business with other austrian companies. when i suggested that i was looking for customers in austria i was told that having a company registered in austria was a prerequisite to be even considered.
this is probably because austrians see themselves as the underdog against germany, so they are very protective of their own and don't want to become dependent on other countries, especially not germany so they don't want german companies dominating the austrian market.
austrians wanting products from austria doesn't automatically make everything more expensive. it only makes it more difficult to open a store that attracts locals.
stores with imported products do exist but they don't have many of the products that everyone wants.
so you're saying that big business should have colluded to brainwash the population into liking foreign products? they should have had better marketing? or lobbied government to force the population to buy more imported goods? How exactly is big business even one percent to blame in this scenario?
Government project tenders are often notoriously intransparent, as ironically evidenced by the fact that the government hasn't been able to stand up a price comparison database for months, as also mentioned in TFA.
Stock prices have nothing really to do with the company itself. Stock is issued by companies, but the value of a stock is proportional to the expected future hype value of the stock. Given sufficient hype, more people will buy in to it after you buy it, and the unit price of the limited stock issue goes up. Stock picking is simply gambling for retail investors which have zero say in how a company is run.
According to the conspiracy theory, investors would see HUGE profit margins and they wouldn't rebalance their portfolio to get in on that? Why does the conspiracy theory rely on all investors being completely immune to earnings and allergic to profits? Why are earnings reports such a massive deal normally but in the grocery business nobody cares? Or why would investors assume that the huge earnings are very temporary and do not improve the longer-term outlook?
The amount of cope in this thread is truly unfathomable. Just straight up economic illiteracy.
Stocks crash on bad earnings reports because the future attractiveness of the stock has diminished. This reduces the likelihood that a future investor will buy your hot potato above the unit price they bought in.
Stocks are fundamentally divorced from economic reality EXCEPT when a company ceases trading and several other rare administrative actions.
Predicting future hype is all that matters. Or time spent fractionally invested in all broader casino hype trains, e.g. VTI
Why in the motherfuck would it be a bad earnings report when, according to this conspiracy theory, gross margins on food would have gone from 1% to 43%? Conservatively that would lead to a ten thousand percent increase in the stock price. Yet instead the stocks of Metro AG and SPAR Group, Inc. are down 25 or more percent YTD.
> Consumers in Austria who travel abroad/to Germany often, already knew they were getting scammed for a long time now, but couldn't prove it and now they can
How was it not blatantly obvious that something is off if the exact same product from an Austrian manufacturer (not owned an international conglomerate) is consistently 20-30% cheaper in a grocery store in Berlin than it is in Vienna, minutes away from the factory where it's produced?
I'm honestly surprised that it took the recent inflation for people in Austria to get wise to the fact that they've been overpaying on groceries for at least a decade.
Especially in the western federal states bordering Germany I would have expected people to regularly go grocery shopping across the border (although supermarket prices aren't uniform within Germany; I have no anecdata about Bavaria, for example).
Its very common for people from Salzburg/Austria to shop in the Berchtesgaden region, however with bigger distances from the border this doesn't make sense.
Re Austrian products cheaper abroad than in Austria - there was the curious case of a beer drink from Gösser, that was sold cheaper 700km away from the brewery in Berlin than in the town of the brewery itself: https://twitter.com/KernNiko/status/1692954540293947408/phot.... Gösser argued they wanted to promote the drink in Germany against local competition and that this was a temporary price drop.
Again, Germany made a smarter move by developing beer powder concentrate (https://www.wa.de/verbraucher/bierpulver-klosterbrauerei-neu... German). This allows them to remove the 90% water share of the beer when exporting it to Asia and still sell it as "brewed in Germany".
>Consumers in Austria who travel abroad/to Germany often, already knew they were getting scammed for a long time now, but couldn't prove it and now they can, so the more important question is what will come out of it, as the data shows the big retailers clearly cooperating on price fixing.
Well they could prove it (ie take the receipt with you), but got lame excuses for why is's cheaper in Germany.
Fellow Austrian here. I have send the link to some journalists and friends. I wonder how to make this actionable both to force politics to act upon this and for the consumer as well.
I was pondering about an idea for an app that will crowdsource prices of items and their development in the time. You know, to be aware when there is some product discount, but during the discount period, the original price is higher that usual which means customer is being mislead.
This practice, although prevalent, is not legal in EU [1]
The app would let you track prices for products in individual stores by scanning their EANs. You could see price development and website could show stores that use unfair pricing.
Seems doable to me but I may be missing some technical challenges that would come with implementing this approach.
It would be the easiest thing to give customers a csv table of the purchased items *directly* in the QR code on the receipt (instead of just a link to some website, where you can download the table as pdf of what). Then people could load it into their app or software and analyze their own data and shopping behavior.
Of course the retailers will never do this.
As Mario writes, the essential thing with this whole topic is:
> If I were trying to describe it in more flowerly terms: It's asymmetric information war fare. [1]
The way for companies to increase their margins is: remove price transparency so people effectively cannot compare anymore.
It's the same concept everywhere: the higher the complexity of the system, the harder it will be for the individual to optimize for their own benefit. Big entities on the other hand, such as big companies CAN deal with complexity and still optimize for their benefit.
Take away message: people should always be cautious of additional complexity creeping into systems. It usually benefits the big actors, at the expense to the individual.
Another feature that comes to my mind is setting up watches for products you are interested in. Especially for people who need to watch every expense, this could come very handy.
Prices should be slightly higher in Austria, because the VAT (Mehrwertsteuer) is 20% for most consumer goods, and 10% for food, vs. Germany’s 19% and 7%, but not as outlandishly so as Mario’s data have shown.
For American readers: VAT is included in the shelf price, rather than tacked on at the register like sales taxes are in the US. Upside: fewer surprises at the register. Downside: it’s less visible.
Prices should be higher for a variety of reasons and they have historically already been higher. It's not just the VAT but particularly super market density, lack of competition on the market, general cost of doing business in the country.
This is a home made problem for the most part, but there is very little appetite to do something about it. Austria in many ways is drowning in very expensive regulation, has high taxation even for grocery store workers.
Excuse me, but what expensive regulation and high grocery store workers' taxation are you talking about that's responsible for making prices so much higher than in Germany?
In Germany while the taxes for a typical full time grocery store worker would be higher, Germany has an extraordinary amount of "mini jobber" working in grocery stores which drives down the cost. Expensive regulation is for instance the Ladenzeitgesetz which restricts a retailer to a regulated number of hours a week with very little freedom to operate the business. Stores need to close before 9, are only allowed to open Saturdays until 18:00 and are restricted to 72 hours total a week and no Sunday trading. Additionally they are subject to very stringent rules and requirements that are untypical to grocery stores in the rest of the European Union from before they can even open a store (Betriebsanlagengenehmigung).
The end result is an incredible expensive market with very little competition compared to Germany.
It helps incumbents. Incumbents have in part exemptions to the rules since they own stores which through other permits can have extended opening times. For instance stores in some train stations can open on Sundays and longer.
It puts new and smaller players at a massive disadvantage.
There is, but not nearly as restrictive. Stores can be open from at least 6 to 20 any day of the week other than Sunday and in most states in Germany, Sunday trading has been at least partially permitted.
In Austria you cannot even operate a fully automated grocery store (either by vending machines or something like Amazon Go) without being afoul of the regulation.
> There is, but not nearly as restrictive. Stores can be open from at least 6 to 20 any day of the week other than Sunday
I just looked up the corresponding law for Austria, and they are allowed to open from 6 to 21 on weekdays, and 6 to 18 on Saturdays. Doesn't really seem more restrictive?
> and in most states in Germany, Sunday trading has been at least partially permitted.
And keep in mind that even for those cities it's not all stores. I checked Cologne as an example, and there it's for example only stores in the district Köln-Lindenthal.
You misread the law. Only for a total of 72 hours. So if you were to open from 6 to 21 you couldn’t open Saturday at all and would have to close early ok Friday.
In practical terms most supermarkets in Austria close at around 7pm.
You have to keep prices in relation to salary and other CoL expenses. Europe in general has lower salaries than the US, this is true of Germany and especially Austria. For me 4.59 for erdnüssen is too high for my kart.
most people are just not ready to move away from their home/family. and even most of those that are would only move to a country where they speak the same language. that means germany or switzerland. and there it means places where they can find a job, which tends to be the larger more expensive cities.
so despite the cost of living, it is really hard to find other cities that offer the same quality of life at less cost.
in short, moving within europe, while possible is not as easy as moving within the US. and moving outside the EU is even more difficult, so very few do it.
also, vienna has massive growth in the last decade, but i think most of those people come from places that are even worse.
Commodities are routinely compared worldwide, and peanuts could be considered commodities. They are certainly closer to commodities than to services etc., even when packaged for the individual customer in fancy wrapping.
I would understand your argument if you were talking about services.
The US produces the 5th most peanuts of all the countries in the world (interestingly, Sudan makes more). It may be a commodity but it’s a local one that doesn’t have to be internationally shipped or be taxed via tariffs. Also, in the US we don’t have VAT and apply sales tax post-hoc, so comparing store prices is really skewed by that.
"doesn’t have to be internationally shipped or be taxed via tariffs"
I agree with the taxation (duties), but actual shipping overseas is dirt cheap. It is more expensive to move your cargo overland by a truck than to move it to the other side of the world using a cargo ship.
The cost difference between moving a container of peanuts from Alabama to San Francisco and moving it from Alabama to Sydney is surprisingly small.
I don't think that point stands for peanuts. I can get a 500g bag of peanuts right now for 2.7 Euros and most likely the reason for that is the cost of living around here.
The key point for me was the quote about asymetric information warfare, where it was impossible to know what the price of anything was until you were at the checkout. This used to be common on durable goods, professional services, and and big ticket items, but data science in retail has got it down to the micro level.
I wish paying with the phone would not only transfer how much we paid where. I'd like to get more details like single item prices. This would enable us to track prices ourselves.
If you have loyalty/coupon apps for the store, sometimes they also give you digital receipts you can download. One day I will automate downloading the receipts and OCR-ing the items .
I don't understand why people, at least in Vienna, go to alternative stores. There are so many small stores with much better food prices in Vienna. I guess prices need to rise even more until people change their behavior.
I wanted to do something similar for Greek supermarkets but I never had the time. Great to see something is available and I don’t have to rediscover the wheel.
The situation with inflation, prices, interest rates and the whole state of the European/global economy is so f**ed up that only with tools like this one we can expose what is happening in the market
>I took the thing down in fear of retaliation by the grocery chains. My plan: get a big NGO, news outlet or political party to host the thing and be a legal shield for the endevour.
Imagine how much good could be done in the world if developers could create things for the common good without fear of corporate legal retaliation.
I have checked a few things and everything other than milk and butter was more expensive in Austria (meat, flour, carrots). Do you have an example of what else is cheaper?
Stop and Stop / Peapod has very aggressive bot detection (probably to prevent just this) so I doubt this would work; I tend to trip it "by accident" just browsing the site and get completely locked out until I clear my cookies.
Had a "oh shit" moment reading the article. I live in Germany, and of course buy groceries. The "discount" games seem very obvious now. Food expenses have risen very significantly recently.
Great article, I hope this gains more traction and or legal ramifications for the grocers.
One trick I noticed while doing data input for supermarkets (in a different market) is that price rises are always advertised as promotions.
Say a supermarket has a $1.10 item and they want to increase that product to $1.50. They'll up the price to $1.50 immediately, and add a "40c off" to the ticket. The consumer sees "promotion" and assumes it's a discount, when it's actually just the same price as usual.
Then ~2 weeks later(depends on average buying frequency) the promotion sticker comes off and the product is now at the higher price.
Every time you see a promotion ticket, you can cynically assume it's a price increase.
I haven't seen one, but changing the base price of the game requires support if I remember correctly and there is also a 30 day minimum wait time between discounts. https://partner.steamgames.com/doc/marketing/discounts
Poland has still been hit by inflation, though. I have taken advantage of having a registered business in order to do a lot of my shopping at the wholesaler Makro, where prices still lag well behind ordinary supermarkets.
It is relevant to the context of this thread in general. Even if Polish consumers are spared the trick of raising prices through fake discounts as the OP mentioned, they still suffer from the same surge in prices that many of the European posters here are complaining about. Nowhere in my post was I calling for price controls.
Where? In that post I shared my own personal strategy for saving money by doing my shopping at a wholesaler instead of an ordinary supermarket. No state intervention required.
The only part I could have left out is the plain statement “Poland has still been hit by inflation, though.” That doesn’t even suggest calling for price controls. Yours was a kneejerk reaction.
In context it is very suggestive. Maybe you are incapable of inferences but other people are not, so I decided it was best to dispel that idea ahead of time.
You didn't say that you didn't imply it until after I brought it up. In fact, you never would have said that unless and until I raised the issue. So I accept your apology.
He didn't say that he didn't imply it until after I brought it up. In fact, he never would have said that unless and until I raised the issue. So I accept his apology.
I think that would be illegal in most European countries. It has to be a "real" discount. Often means to have been sold at the original price advertised for at least a month.
Pretty much not for me. I both have a bunch of products imported from receipts over the years, and I remember many per 100g prices for products I regularly buy. This simply does not happen, at least not at the stores I shop for the products I buy (note that I don’t buy any finished meals or processed food outside the occasional salami, so my habits are pretty different from most people).
Same, I track the prices of a few dozens of products across the six supermarkets I go to, in France and Belgium (every day, automatically) and this has never happened.
REWE and Edeka have trained me to only buy “fancy” (Mövenpick, Cremissimo) ice cream when it’s 1,99 EUR, not “normal” price of 3,99, and to prefer whichever is “on sale”.
And I detest that decent ice cream only comes in ridiculously-shaped thick plastic that’s only good for chucking in the Gelbe Sack, not in waxed paperboard or at least a sensible container to reuse for other things.
Of course you are supposed to keep and collect those useless containers (plus lid) since you "surely will be able to use them for something" in the future. For storing screws, rubberbands and Kulis that nobody has or keeps anymore... A roll of Gelbe Säcke might fit inside.
This already exists to some degree in the form of the HICP [0]. One of the categories in the index is food and they have a neat little tool where you can compare countries [1].
It doesn't cover every single product on shelves though, just a pre-selected set of products that's compared across all countries.
There's a myriad of datasets being collected and published by Eurostat.
What are the legal ramifications grocery stores can realistically get into ?
Are there any examples of stores getting in trouble in the past? Did it actually solve anything ? Obviously the stores are not scared of any ramifications.
What if grocery stores operate on very, very low profit margins, on the order of low single digit percentages, and hence if their vendors (including employees) increase prices, then they also have to increase prices (or else they go out of business), and that is why multiple grocery store businesses increase prices at the same time (because Nestle/Mondelez/etc are increasing prices for all of their buyers at the same time).
Just to clarify, are you saying this is the excuse shops can use in front of a judge? or that OPs conclusion is actually wrong, and there is no collusion among shops to start with, just fair and square supply and demand ?
Do they mean foreign companies operating in Austria, or separate DBs/web sites for other countries? (The forks[1] don't have legible names) I'd love to see a New Zealand one, as we have a big problem right now with rising cost of living and lots of suspicion of shenanigans.
The website has a 'Mueller' and a 'Mueller DE', I assume the first one is Mueller in Austria.
I've looked into doing something similar for Colesworths in AUS but they make scraping their websites very hard on purpose [1]. OP was lucky that they got the anonymous since-2017 price dump! I can't find anything similar for ANZ.
Interestingly, the cheap toast at Coles almost doubled in price since 2021. That fits with my general observations here: the general cheap staples got way more expensive, the expensive stuff stayed similar. https://pricehipster.com/product/Gwzex_LRGY2ueMAelqR-xg~BkG5...
He added foreign stores that sell the partially sell the same things. Sometimes these stores also sell Austrian products which are cheaper in those countries than they are in Austria.
Most famously, Red Bull, which is made in Austria but it's actually cheaper after it gets shipped to Germany than in the country it's made in. Insane. Austrians are being flogged. Germany feels like the only EU country with some sane competition in the retail sector.
Red Bull is not made in Austria, at least not necessarily. The European company is headquartered there, but its business model is largely just owning the IP. The filling of Red Bull cans is outsourced to Rauch, which produces at least some of the product in Switzerland.
The swiss-made Red Bull is exclusively for non-EU markets. It is a customs/cheap water/nearby headquarters thing.
A lot of Red Bull is made in Austria too.
I get the feeling that the same tricks are being played in Switzerland. Coop and Migros feel a lot like a duopoly, and discounts also cyclical. Not unusual to see 40% discount on outrageously overpriced detergents, for example.
In Switzerland such pricing tricks would be somewhat expected since it's not an EU member meaning it's isolated and less impacted by the free market pressures and competition from the union.
You are hinting towards the bigger issue here. Yes, this guy has looked through the crack in the matrix, but the fact that inflation is impacting prices all over the western world directly and elsewhere indirectly has nothing to do with pricing shenanigans of the oligopolies.
These are issues that not even perfectly regulated and perfectly competitive markets could change, if that were even possible. These are systemic monetary, political, governmental issues.
I hate to break it to people, we are currently only in a lull where some may feel localized price increase pressure relief, but that is just a temporary condition.
The things that have been done, especially over the last several years, cannot be done without suffering the inevitable consequences, regardless of how much one did not consider them or wants to believe that they are starting to grip.
Unfortunately for people this is only the beginning of this roller coaster; and most here and in the subject mastodon thread are part of a social strata that is only affected in limited degrees. There are people who worked all their lives with a promise of a pension, only to find out that they get half of what some “refugee” and “immigrant” gets that hates them and is violating their indigenous society and culture. They have something like $/€1500/month and see their cost of living going up a compounded ~30% over five years while the government/pension masters keep promising an eventual 2% pension/retirement/social security increase.
No component of any culture is strange until you compare it to a different culture. Here's a funny:
An Italian millionaire visited my relatives in the Netherlands, while walking around town he went on some rant on how ridiculously fragile everything in the public space was. An example he pointed out the many concrete raised flower beds maintained by the city. Look! He said, walked up to one, started ripping out the plants and throwing them around. Look! Anyone can just do this! You can take the plants home and sell them! Who is to stop me? As if a poor movie settings, A police car drove by behind him that same moment, they stopped, walked up to him from behind, the first thing he noticed was his arms pulled behind his back, click handcuffs on. They turned him around, walked him to the car, put him in the back seat. All without exchanging a word. An hour later he was returned. It proceeded to very loudly proclaim (the way Italians do) that it was the best 75 guilders he spend on his vacation and that this was the best country he had ever visited. The next day he noticed his flower bed was restored and silently pointed at it.
In Czechia. Your poor neighbor is it exactly the same. Discounts. Consumer behavior. Bigger prices than in Germany and retailers making idiots from their customers.
You might like to check out the cheaper end supermarkets, you can get 1kg potatos for 0.60ct at my local Kaufland (when they're discounted). Just get enough so they last until the next discount. Normally they're around 1.00€.
I'm not sure if it's still happening but... there was a potato shortage during the pandemic. At least here in North America. It had to do with a disease affecting the crops IIRC.
Depends. Germany is a lot bigger than just Munich and Berlin.
There are cheaper places in Germany (NRW for example) where you can pay rent close or even less than Vienna while still benefiting from much cheaper products and let's not forget, the higher wages (there's no big tech nor big SW companies in Austria so tech wages are depressing).
So you're still better off in Germany, if wage/Col is your priority and not the history/culture/vibe and other such non-easily quantifiable things.
Munich and Berlin (as well as Hamburg and I personally know people from Cologne that move away due to rent increasing heavily) are really expensive for German standards though. They're almost statistical outliers.
A lot better too. Rewe has ton of options and quality food compared to billa. But I think the supermarkets in germany are better than anywhere else in EU.
I agree that most Rewes are really good. I'm from the UK and Rewe is comparable in quality and selection to the absolute best supermarkets in the UK like M&S and Waitrose, but much cheaper than M&S and more readily available than Waitrose.
That said, I've definitely been to a couple of poor quality Rewes, though most often this is in rural areas or on the outskirts of major cities.
Overall I prefer EDEKA for a few reasons.
Generally I think Germany does well to have a strict two-tier system: there are supermarkets, and then there are "discounters" (lidl, aldi, penny, netto, etc.) and they are very different and have very different aims. The good supermarkets feel free to sell whatever they want because they are not competing in price with the discounters, since most Germans are accustomed to shopping at both lidl and Rewe in the same visit. There is also a third tier, "Bioladen", which often have really good high quality organic food for a reasonable price.
I have to criticise the discounters though, specifically lidl and aldi, they do not give you baskets, only carts, and one of my local lidls had a policy for a few months of not allowing you in the shop unless you had a cart!!
German food shopping is very complex overall, but the quality and range of options is impressive.
Austria, is a zone of experimentation for large German companies like T-Mobile, REWE and friends.
Longer explanation, the bottom line is that they can do it and get away with it, why and how are just excuses and cause for infinite talk on the subject. They are allowed to get away with it, and so they will do it, basic economics.
rant/
The same applies to literally the entire world now. With the "new world order" after COVID prices for literally everything have been on the rise, with ample excuses to justify this. Then the "war" in Ukraine came along and gave the greedy in the world yet another new set of excuses to justify increased prices.
Sure, there could have been rational justification to increase costs temporarily, but long term, it feels like a global, coordinated scam.
Take energy prices in Germany and Austria for example. The energy companies were literally given the green light to scam the populace by dramatically hiking the price of fuel, and electricity.
The cost of petrol and diesel almost doubled, the price of electricity (even though MOST of it is made from rivers flowing, therefore with no significant increase in underlying cost to generate) was more than doubled in some cases and kept this way for many, many months.
So since petrol and power now costs double, we can increase all the rest to go along with it, right? Sure, let's do it!
Yeah, the politicians started yammering about how they'll tax these extra profits but the bottom line will be that all of these huge corps will get away with it, and they'll run away with tons of profits that they were never supposed to have.
Are we ever going to go down to pre-war/pre-covid costs and prices? my estimate is that it's highly unlikely and never going to happen. With minor ups and downs on the way to keep us happy and talking, pricing is only going to be trending one way, up.
Way to go our fantastic, democratically elected officials. You guys are so talented, smart and you really seem to care about your people. Give us more of this goodness please, we can't wait! We're going to elect you or your talented replacements as well next time, don't worry about it!
The world is turning into Idiocracy fast, and the speed at which its heading there is only accelerating.
Governments should mandate published prices for all goods sold in supermarkets, it would be good for competition and almost trivial for the companies to publish CSV files with barcode, price, start and end dates.
Of course doing do would be disastrous for the supermarkets, so I can imagine they would fight and lobby politicians vigorously.
Supermarkets seem like an undeserving target for this scrutiny. Profit margins for grocery stores are only 1-3%, so they're hardly engaging in price gouging. The average U.S. household spends less than 10% of its monthly budget on groceries and other food.[0] This number is half of what it was in the middle of the 20th Century, and probably lower than any time in history.[1]
Just do all retailers, for supermarkets it is easy to implement, many publish the prices already. The customer ends up paying for the implementation anyway therefore the question should be if the customer is interested enough in this "new" product. I cant imagine someone poor enough to not want to know where to shop?
OT I would take it much further: I want government to process all transactions and do VAT automatically. You upload the price of your jar of peanut butter, you upload my order of 10 jars, I pay though the government portal, the amount after taxes is deposited into the store's bank account.
Then we could do lame things like ration peoples liquor, the amount of weed they buy, increase the price of your 15th quarter pounder this week but also prevent people from buying all the toilet paper in all the stores. (why have such a convenient mechanism for foreign agents to turn a country into chaos?)
Besides getting rid of the slow, complicated, bureaucratic, expensive administrative burden of taxation and the fines that come with it it would enable very lame things many would oppose and they would be right to do so. That is, until rationing is needed for some reason. Then you have a robust system in place to do it.
I mean, I can easily buy all of the canned food from my local stores. Why would I leave any for you? I'm sure people would prefer it that way. When a real crisis arrives you'd really want to be spending your time on preventable side effects.
This is what people keep repeating about ISPs - "look, they don't make any money!"
Yes, yes, you can offer a terrible service, stifle competition, ripoff customers and not make any money - all at the same time! Such is life in the local maximum.
This is true but housing cost has risen significantly (in percentage of spendable income) over time so there is an offset to play with here. You cannot take those basic costs alone.
> Of course doing do would be disastrous for the supermarkets
I'm not sure this would be true, at least in the United States.
WalMart used to have a tool where you could scan your receipt in their app, they'd compare prices to competitors and if they found a lower price, you'd get a rebate.
That seems like a pretty significant limitation. Bulk entity matching is an art form outside of the scope of many. To enable meaningful comparisons, as many identifiers as possible need to be included.
This seems like an odd thing to state with such certainty. I'm not sure I see how it would be good for competition either - having worked for a grocery store before, management was generally aware of competitor's prices, at least at a "we send someone to every other competitor every few weeks to check prices on major important stuff". We were very open internally that we had the prices of a few items pegged to always be cheaper than any price Walmart had for them.
As stated other places in the thread, most grocery stores are super low margin overall. Especially on basic food items. Things like canned goods, basic cuts of meat, eggs, milk and the like were often sold at cost or even at a loss. Things that we actually had good margins on were mostly products where we had vertical integrations or special contracts with farms or factories - we were matching our competitors' prices, but at a better margin because we'd worked out how to pay less for the raw goods.
With all that in mind, I highly doubt how "disastrous" it would be to have a public price database. Sure, you could probably shave your pennies by spreading your shopping over 4-5 different stores because they're each slightly cheaper than each other, but you'd almost assuredly spend more in time and transportation costs to do that than you'd save.
What would cause the stores to lobby against it is that many stores, especially now, change prices on things pretty often. The CSV you imagine publishing to a government site is something that, as I recall, takes something like 5 hours to generate every night due to the vast variety of products across the company, and the fact that different stores in different areas may be pricing products differently or offering different coupons, or simply not stock the product at all. There is no one price per barcode universally across the company, so the outputted pricing list ends up being gigabytes of data.
Is there not a EU-level research service that does this? I would be surprised if there is not something like the USDA's Economic Research Service, that has price data on virtually everything you can eat, going back 50 years.
Funny how the two most pro-Russian EU countries, Hungary and Austria, are the ones suffering the worst inflation despite continuing to trade with Russia.
The only parts of the countries doing well are Budapest and Vienna that are both controlled by opposition parties.
Cant talk about Hungary but in Austria the reason is the incredibly broad and untargeted financial assistance for everybody because of the energy crisis and covid.
The reason for this is technical incompetence and cowardice of the government. They could not have done something better even if they wanted and they fear the voters far too much to let some hurt go through the system.
I am no rich antigovernment libertarian but there can be no surprise that all those measures
But how does this concretely affect supermarkets? They presumably didn't raise wages, they didn't have to pay more for their wares(at least not at the level they raised their prices at, after all they have probably long-term contracts at generous oligopoly conditions) and their electricity bill is maybe at most 10% of their cost. This is purely extortion.
Just to reiterate, my electricity bill last year went down from 1k to about 650Eur because of some aid or another while I am sure some family cant afford basic necessities.
They don’t. We’re far away both from the previous and upcoming winter. Are you saying that during winter Austria is going to be doing worse than others?
Don't think so. The storage capacities in Austria are rather big compared to other countries. In contrast to last year the gas storage facilities are already filled to the brim.
Both Hungary and Austria are still buying huge amounts of gas from Russia (Austria: 71%, Hungary: 80-85%) and also oil in Hungary's case (80%)[0]. Meanwhile, other European countries had to look for more expensive alternatives. One of the main reasons given for inflation in those countries was the energy crisis. What's the reason in Austria & Hungary?
Pro-Russian right-wing parties in Europe are blaming inflation on our sanctions on Russia. If that was the case Hungary and Austria would not be the the countries that are worst affected by inflation.
First, I wouldn't say that Austria is pro-Russian. Neither official politics, nor the majority of the people (with the notable exception of the infamous FPÖ).
Then, it's mostly about infrastructure. While the western parts of the country have broad access to renewable energy, like hydropower, the eastern parts heavily depend on natural gas, with not much of an alternative as far as infrastructure goes.
We may also point out the questionable wisdom of EU politics, announcing prematurely the exit out of then predominant sources of natural gas without having any alternatives already secured or even at hand, nor the bigger infrastructure being able to handle any routes alternative to the established ones at scale, while having a deregulated energy market at the same time. With predictable outcome… (Talk boldly and carry a small twig, as they say.) Some countries are impacted by this more than others, with regard to their traditional energy mix and local climate. (Countries and regions with a continental climate are impacted more than others.)
Bruh, that's old news. She now moved to St. Petersburg to work for the Russian government and the Russian air-force had to fly her ponies in too (because that's what you use your airforce for in times of war). It sounds like an Onion article but it's real.
Notably, this happened before any of these events, and to help you with Austrian history, the entire "family" has been since dismissed. (Kneissl is now a blogger in Russia, far from Austria or its politics.)
This is in historical context rather ridiculous. This is actually related to the Gulf War, and Iraq (yay, the Western ally in the greater region) formerly prominently supplying Austrian demand. With sanctions and then the war, Austria was looking for alternative sources and settled on Russia, which offered long-term guarantees and has thus stepped into the role of the most prominent supplier, since. (I actually do remember the then federal minister stepping in front of TV cameras and declaring supplies secured, thanks to this "historic deal".) In hindsight, this is more a case of out of the frying pan and into the fire. Not that there hadn't been internal and external pressure to do anything about this, but, as infrastructure had developed, there was – and still is – not much of an alternative. Mind that some German natural gas storage is located in Austria and is supplied by the same sources, as well.
This is tied to those days of the coalition of the conservative party with the FPÖ, which terminated on Mai 28, 2019 (which is significantly before 2022), with strong positions of the FPÖ in the entire security apparatus (including some infights with strongholds of the conservative party in these institutions, related court cases ongoing). Kneissl left already before this, in early June 2019.
The FPÖ had actually signed a cooperation agreement with Putin's party "United Russia" in 2016, which is not to terminate before 2026.
Austria and Vienna in particular as a "playground for spies" is something entirely different and goes back to the days even before the Cold War era. Austria has, like many other countries, only laws against espionage which is against its own interests. So espionage against an other country has been perfectly legal. This also served a vital function in the Cold War era, where Austria, also after WWII a neutral country and explicitly so as a buffer between blocks, played a bridging role and was a crucial exchange. However, most of this espionage was actually what we would now call open source intelligence and it was really more a matter of proximity to the places of actual interest.
(On the other hand, the Austrian military intelligence has some agreements of cooperation with the NSA and won't report to parliament on the matter, while the latter still has official oversight. As citizens, we can only guess. So, I wouldn't say that this is particularly lopsided in favour of any Eastern interests. Moreover, Austria installed a law, which fines relaying any Russian sources by up to EUR 50,000, rather early on in the conflict.)
>the Austrian military intelligence has some agreements of cooperation with the NSA
Same with Australia, whose people are also unable to gain oversight over their militarys' activities.
The more the "mah' Russia!" crowd bleat, the more it looks like we've actually manifested the very apparatus the Soviets' would have implemented, too, were they still around ..
The situation in Austria is fundamentally different than in Hungary.
In Hungary the government kept prices of energy and food down by law for quite some time when everywhere else prices where rising. What they see now is the catch-up effect after those restrictions fell.
I actually do not know what is the reason why the Austrian inflation is still that high. Energy prices as are like before covid, but food prices keep climbing. Maybe because the largest retailers Billa and Spar have almost 70% of the total market share they can do what they want (with the clients and the producers)
I guess we also have to wait for one or two years that real estate/rent prices start going down for real (real estate prices are almost stagnating now, but rents are still rising). That may have a real impact on inflation.
The Austrian inflation problem is easily answered: wage inflation (collective bargaining agreements), paired with high gas costs, paired with many inflation linked contracts such as rents. Many of these feed back into the inflation basked and just make inflation quite sticky.
I cannot judge what "EU average" is. I can only tell you that the gas price that a household customer pays today is still twice than it was before this crisis and that is reflected in wholesale prices if you compare the cost of gas in Austria compared to 2020 and earlier.
I guess what he meant was that big retailers colluded to increase prices simultaneously together in lock-step for no reason other than greed and profiteering, and simply blamed it on the Russo-Ukrainian war as being the reason for prices exploding.
I believe the OP was referring to Far-right, pro-Russia parties getting their 'come-uppance' by the rest of the world, but I'd really like to know more details about that.
Not that I doubt that big corporations would use the Russia excuse whenever/wherever they can - I mean, who wouldn't - but I'd just like to see the details that tie the inflation to support of Russia a bit more clearly laid out.
Nothing to do with being pro-Russia. EU farmers themselves were against duty-free imports of cheap Ukrainian foodstuffs because unfair competition to them which they can't compete against.
If food and housing gets too expensive, then sorry mate, nothing we can do about it, that's just how the free market™ works, try working harder.
But when labor gets too expensive pushing wages up, then it's no longer the free market, but it's a "labor shortage" catastrophe all over the media and we have to shed tears about the poor business owners wo can't afford a second Porsche, so immigration gets turbocharged until wages come down to their desired levels that businesses can agree is "fair".
have you ever tried building a house? it's one of the least free markets there is. the quickest way to get arrested is to buy cheap land and start putting up houses willy nilly
>have you ever tried building a house? it's one of the least free markets there is.
The "free market" in the context of housing was meant in a satirical way hence the TM symbol. Of course that market is 100% fixed by design but we get parroted the story where it's 100% "free" as if the government has no control over the levers that wholly impact it's pricing (zoning and building regulations, immigration, interest rates, banking and loan duration regulations, banning overseas investors, banning AirBnBs, property taxes, etc)
well, there are genuinely dumb people out there who think that housing is a market failure. like homebuilders are unwilling to take necessary risks or something. and they definitely don't mean the risk of going to prison (100%)
Certainly in the U.K. house builders sit on masses of land but don’t develop it for fear of lowering sold prices. If building a house costs £100k Better to sell 5 at 400k each year for 10 years than sell 50 at 250k
That's not a failure to take necessary risk or a problem of a too-short time horizon. Quite the opposite. And it is certainly not a tragedy of the commons situation.
At least not until you factor in government. What landowners and land speculators clearly don't fear is huge swaths of land suddenly becoming available for building. Or sharply increasing interest rates. Or mass deportations.
A market failure is more like how a CEO is often incentivized to maximize the stock price in the short run at the expense of the long-term health of the company. That is how his compensation is structured.
Not only that, have you ever tried understanding building code in order to construct a "legal" residence? Sometimes it is regulated to the point where I could not build a house unless it had the right angle and shade of red terracotta roofing tiles.
House builders in the UK can employ independent, non Govt, inspectors to ensure they are building to regulations (our equiv of your building code). You can imagine how well that works since these inspectors only have one client.
The beauty of housing going up is the “work hard” in tears wages which then increased the price of housing.
The land owners take all the extra work and laugh all the way to the bank.
Of course if people collectively decided to work half as hard there would be less money for housing and then prices would come down. Workers wouldn’t lose out.
Then when wages do come down and questions get put to politicians and the central bankers about the lack of wage growth they shrug their shoulders and act confused like it's some unsolvable math problem.
What are the profit margins for Austrian retailers?
In the US, all the retailers earn razor thin profit margins (except Home Depot/Lowes), indicating if prices were lower, the businesses would fail, or at best become charities.
Edit: for the one Austrian retailer I could find numbers for, they are not pretty. Not sure how the retailer can lower prices without going out of business if they already have sub 1% profit margins.
We're talking about grocery stores here, not just general retailers. I have a really hard time believing that US grocery stores are operating on razor-thin margins here, given how extremely expensive groceries are (when adjusting for income, other cost of living etc.) compared to e.g. Germany.
One problem of the Austrian grocery store market is that there's just way too many branches per capita (compared to the otherwise pretty similar market of Germany again), which brings down margins.
It is all public information. Plus, logically, it is a low barrier to entry business with zero moat. There are lots of sellers willing to sell for barely above cost.
These are the two biggest grocery only retailers in the US:
That could be an explanation if the entire Eurozone were affected uniformly by inflation. It's not, though, and Austria is seeing the highest levels.
A big contribution to this is the government's policy of heavily subsidizing various costs: Energy, rent, even groceries were subsidized via various vouchers and payments for a while, and now there's even discussions of "capping interest rates" – of course inflation won't go down if the purchasing power remains inflated!
Note that I'm not concluding that this is necessarily a bad development: It might just be an effective way of redistribution – but only time will tell, and personally I'm glad to not be part of the experiment.
That's also a powerful tool for wage suppression and it's been used for decades to constantly low-ball workers.
Thank god in the last decade we saw a lot more transparency online through user provided open source salary data, which helps even out this asymmetry a bit and have workers demand their market value and hope to not get massively low-balled like before.
>I think that’s a great term in explaining how “the free market” doesn’t work.
It only works for those who set the prices as they can collude on price/wage fixing whereas workers and consumers can't organize in similar fashions.
It has also been shown that much of the population prefers buying something for $x if the price tag claims it has been discounted rather than $x without the claim of a discount.
Assuming an efficient market, price strongly correlates to (some measure of) value. Now if I over you something that's worth $5, or alternatively something that's worth $10 but that for a short you can purchase for just $5, which item do you choose?
Of course ideally you would properly evaluate how much the item is worth, in utility, quality, longevity, social status, resale value, ethical production, etc. But that's difficult (often on purpose). The seller knows what the item is worth, you have to guess, or just use price as a weak proxy.
So in a sense, people preferring discounted items is an effect of asymmetric information
>Now if I over you something that's worth $5, or alternatively something that's worth $10 but that for a short you can purchase for just $5, which item do you choose?
I have no reason to assume that simply because you tell me something may have sold for $10 in the past, that it has any bearing on the relative utility per dollar of that item in the present.
I only look at the price I would be able to buy at, and search a few other retailers on my phone, and determine if it is an acceptable price.
People prefer discounted items because of ego. They like to feel like THEY got a deal.
Asymmetric information warfare is the method of abuse for all systems; “free market” that is nothing like it, “democracy” that is not the self-interested will of the majority, and also the false solution to “free market” and the “saving democracy” that are pushed by the oligopoly ruling class system in a false guise of social justice or “wokeness” and claims of saving fake democracy.
The "free" in "free market" refers in part to free flow of information. Surfacing information about prices is kind of the point of a market. It's a mechanism that assigns prices "automatically" (as contrasted with central planning, etc.)
I don't know much about economics but I know, or think I know, that much.)
You're right, of course, but that one got hit by the flamewar detector (kind of correctly, unfortunately), which sank the thread. There's obviously community interest in this story, so I think we'll leave the current thread up and merge the comments hither.
As compensation for luu (surely one of the best HN submitters of all time) I've put this one in the second-chance pool, which will give it a random placement on the front page:
If anyone wants to read a long rabbit-hole description of how we handle these cases, I wrote one for some reason a couple weekends ago: https://news.ycombinator.com/item?id=37364619
Supermarkets are colluding to increase prices as all companies are wont to do. There isn’t enough competition to act as downward pressure on prices.
This isn’t a monetary thing that YouTube says - the goods a few miles away in Germany aren’t seeing this, despite being in the same currency and no difficulty transporting them. In a free market a competitor would buy from the same supplier the german supermarket does, undercut the competition and force all prices for.
However that doesn’t work because consumers in Austria don’t realise how they are being ripped off, because while the large corporation has all the data to manipulate and extract maximum revenue from each consumers the consumer lacks the data to do the opposite.
>However that doesn’t work because consumers in Austria don’t realise how they are being ripped off
Oh, they have known for a long time they were being ripped off but didn't have the proof. There's nothing they can do about it because the corrupt politicians claim it's just the free market and can't intervine with the market pricing otherwise it would be communism, and Austrian consumers who don't live close to Germany have no other options for shopping than the local monopoly.
There is evidence that the prices they charge in Austria are often significantly higher than in Germany, meaning higher profits per sale, at the expense of the consumer who's wages are lower than those in Germany, so it's a double whammy.
In the US, many times you cannot compare prices between cities much less states due to differences in land price and costs of city and state taxes/regulations such as minimum wages.
Surely, Austria and Germany, as two different countries, have at least a few big differences in tax systems/labor laws/local laws/etc that can affect cost of goods sold?
The retailers have been questioned regularly why they overcharge in Austria compared to Germany, and they never cited extra wages(lower than Germany FYI), business or tax overhead as the reason, but rather beat it around the bush saying "we're only charging what the market will bare and this is what the Austrian market bares", basically admitting they're screwing you and getting away with it, especially that they often sell stuff made in Austria cheaper in Germany.
I guess that is technically the truth. As a business owner, I also charge the most I think my customer’s were able and willing to pay.
But in all cases I am familiar with (US/Canada/UK/Germany), there are sufficient competing grocery retailers that the price most customers are willing to pay is only a couple percentage points higher than the cost of goods sold.
That does not reflect actual reality. Retailers have answered plenty times why they are charging higher prices in Austria compared to Germany and the arguments are hard to ignore (higher cost of doing business, higher taxes, higher density of super markets, more rural delivery requirements etc.).
Specifically on that point:
> extra wages(lower than Germany FYI)
That is incorrect, the cost of an employee in the grocery space per hours worked is still higher in Austria than Germany, quite meaningfully so.
> There is evidence that the prices they charge in Austria are often significantly higher than in Germany
The cost of doing business in Austria is significantly higher for supermarkets. On the one hand because Austria has many more supermarkets to begin with per chain, secondly because of the high cost of labor in the country. Comparing countries that way is not trivial.
so naturally the stock prices for these grocery chains should be skyrocketing. please show the stock prices for these companies or I will know fairly definitively that you are just doing stream of consciousness outsider art
If they're doing so poorly, why are they giving such steep discounts in Germany and not charging Austrian prices to bump up their margins? Are they stupid to leave so much money on the table?
There is significantly higher competition in Germany than in Austria when it comes to supermarkets. Grocery chains might very well want to push up the prices more to restore margins but might find it hard to do so.
The obvious answer is that they are not giving steep discounts in any country. Almost certainly their gross margins are between zero and three percent in both countries.
The reasons IMO are: * less price sensitivity: German people are extremely price sensitive, they discuss and compare prices all the time. In Austria people care way less about this on average. Supermarkets take advantage * higher logistics costs: population density in Austria is less than in Germany. Furthermore, many supermarkets are located in areas hard to reach like mountain areas. Higher logistic costs translate to higher prices * VAT is slightly higher in Austria * unqualified labor that works in supermarkets and logistics makes slightly more money in Austria than in Germany * there indeed is a higher supermarket tensity in Austria than in Germany. Supermarkets of the same company appear more appealing in Austria than in Germany: nicer presentation of food, cleaner, way less people in the line waiting. All this makes them more expensive
For all these reasons mentioned above prices are higher. I argue it's mostly related to consumer choices. If they would care so much about prices and so little about esthetics as in Germany then prices would come down. If people would start to walk the extra mile for the cheaper supermarket prices would come down.