Products Analyzed
Recent price hikes in the grocery basket across Spain have clearly reduced the purchasing power of households, especially for those with middle and lower incomes. A detailed study conducted by the German bank Raisin shows that a broad range of essential food items has risen by an average of 71 percent from 2019 to 2024. This analysis is based on real price data gathered from supermarket websites, using a tool that compares current prices with those from previous years.
Products Analyzed
The products included in this analysis cover staples across categories such as dairy, fruit, vegetables, eggs, pasta and rice, legumes, meat, fish, coffee and cocoa, and cereals.
- Lacteals
- Fruits
- Vegetables
- Eggs
- Pasta and Rice
- Legumes
- Meat
- Fish
- Coffee and Cocoa
- Cereals
Price Increases and Quantity Reductions
The report notes that, in addition to rising prices, some companies have adopted a strategy of price cuts in the form of a smaller product quantity while keeping the price unchanged. This affects consumers indirectly, as they receive less product for the same cost, amplifying pressure on family budgets.
Impact on Purchasing Power
Even though nominal wages have risen, the increase has not kept pace with inflation. The minimum wage rose by 26 percent, from 900 euros in 2019 to 1,134 euros in 2024. Yet this gain pales beside the 71 percent increase in the cost of the shopping basket. For many families, this means a larger share of income going to food or a need to cut back on other purchases and savings.
For households, nominal income growth has not translated into proportional gains in buying power. The study highlights that families must either buy fewer items or allocate a bigger portion of their income to essentials, leaving less room for savings or discretionary spending. A key spokesperson from Raisin Spain notes the mismatch between wage growth and the consumer price index, pointing to a direct impact on purchasing power. To maintain 2019-level consumption, households would have to adjust their spending dramatically, signaling erosion in both purchasing power and savings ability.
The Raisin study underscores a growing gap between the cost of living and salary growth, emphasizing the mounting economic pressure on Spanish households. As prices continue to rise, it is crucial for policy measures to align wage increases with inflation, ensuring families can sustain their purchasing power and quality of life. It is reported that the government has signaled extending VAT relief beyond the chosen deadline for basic goods and maintaining reduced VAT on olive oil as a temporary measure.