“Darling, do you remember last year when everything was way cheaper?”
Juan, 36, complains to his wife about rising prices every time he comes back from the supermarket.
It’s not an unusual scene in a Spanish household: in the last year, the cost of living has been steeply rising, with prices of food and non-alcoholic beverages leading the way.
But this time around, it has been too much. February hit a record high, with an average weekly food basket increasing 16.6% compared to the same month last year, according to the latest data released by the National Statistics Institute (INE).
Last month’s increase has been the highest since 1994, when detailed records were first started.
“This situation is forcing us to keep looking and comparing prices,” Juan told Euronews. The engineer, who lives with his wife and six-month-old baby says he’s seen a 20% increase in the price of his shopping basket compared to last year.
And he knows his numbers.
“I keep comparing prices online. I have set on every phone alert on supermarket apps, especially for the baby’s nappies, and I only buy when a bargain comes up,” he says.
For Mara, a 56-year-old carer for the elderly, the situation has become much more complicated since inflation put pressure on the price of her shopping basket.
She is a ‘mileurista’, a term used in Spain for those with a salary barely reaching €1,000 per month.
That amount has to be cleverly used to feed “three and a half people”, as she counts her grandson with whom she spends weekends too.
“I used to spend €50 a week on groceries, now I pay more than €125”, says the Spaniard.
Mara has been forced to cut on some products. “We had to stop buying beef and now we only eat chicken and turkey. We also stopped buying some of our favourite fruits, such as watermelon until we see the price drop,” she adds.
There are some fruits that they still can afford, but they have rationed the amount they eat.
“We love melon, we used to eat two slices per meal, now we only have one so it will last longer,” she says.
Mara recieves her salary on a weekly basis and she uses it to pay her rent. Before she managed to put a little money aside in case something unexpected happened, but inflation has made this impossible.
“I can’t save money now”, she laments.
Skyrocketing prices
Fresh foods, such as vegetables and fruit, have seen the steepest price rises.
It has especially affected fresh vegetables, which have become 11.2% more expensive in the last two months alone.
The Ministry of Economic Affairs argues that this is due to the fact that there is less supply “as a result of unfavourable weather conditions”, both in Spain and in other EU countries.
“This has led to a rise in prices due to the increase in international demand”.
According to the National Statistics Institute, the greatest increase has been seen in sugar, where prices have risen by 52.6% in the last twelve months; followed by butter (39.1%), sauces and seasonings (33.8%), olive oil (33.5%) and whole milk (33.2%).
This steep rise has taken place despite the government trying to control price rises — and the impact on households — by reducing VAT on some basic products.
For example, the reduction has cut VAT from 4% to 0% on fresh products; and cut VAT from 10% to 5% on oil and pasta.
Other measures introduced by the government to curb the crisis are a €200 grant for people on low incomes, and €300 million aid to farmers to help offset increased fertilizer prices.
Why haven’t the measures worked?
Laura, a 52-year-old single mother, receives a €50 euro cheque in her local municipality of Parla, some 20km outside of Madrid.
She uses it to buy food every week.
Parla is the third poorest municipality in Spain and its working class neighbourhoods have been particularly hard hit by rising prices.
“It’s almost impossible to buy chicken, and pork is also going up in price. I can only afford canned and frozen vegetables because that’s the cheapest thing,” she tells Euronews.
“I used to buy enough for almost the whole month with €50 and now, with this amount of money, I have just enough for the week”, she adds.
Laura struggles to make ends meet, and saves the meat she buys for her two children, while she eats a cheese sandwich.
“There has been a brutal loss of purchasing power because wages are not reacting to rising prices in the same way. That’s why families are having a hard time and need to adjust their budgets,” explains Carlos Martín, director of Comisiones Obreras economic bureau, Spain’s main trade union.
“According to the latest data available, the average wage has grown by around 3%, while food prices are rising by up to 16.6%,” he adds.
Martín argues companies are taking advantage of lower taxes to increase their profit margins even further.
“We have seen business margins at historically high levels,” says Martín.
Just this week, the president of Mercadona, one of the big supermarket and distribution companies in the country, said that they had “raised prices by a huge amount” and if they had not done so, the situation “would be a disaster”.
Spain is not the only country coping with inflation, high food prices are also imposing cost burdens on households across Europe.
Food price inflation in the EU was 18.2% year-on-year in January, according to the latest detailed data from Eurostat.
Rising costs, starting in 2021 and worsened with the outbreak of war in Ukraine a year ago, are the main cause, along with lower production in the field due to poor harvests.