ISET

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After quite a number of declines food prices started to increase in the beginning of October signaling the end of fresh fruits and vegetables’ season.
Retail FPI for the 2nd week of October is 5% higher compared to the last week of September. Increase in prices is driven mostly by the increase in price of vegetables and fruits. Plum became 35.4% more expensive in October, eggplants’ price increased by 21.4% and apples gained in price 17%.
Although average prices increased, not all the supermarkets have higher prices compared to the previous month. As indicated by diagram there is high difference in prices (high variance) in fall caused by one of the supermarket’s huge promotions in September. Since up to fall, prices were more or less stable, seasonal promotions appear to be used by Georgian retail food chains.

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Food prices in the largest supermarkets of Georgia have been on decline over the last couple of months. Prices started adjusting downwards in July 2015 and the trend persisted in September. According to ISET Policy Institute’s Retail Food Price Index (Retail FPI) in September 2015, prices were 1% lower compared to August 2015. While not very significant, this drop in prices brings Retail FPI to its lowest point since the Index’s launch in November 2014. In September, the Index was 3% below its November 2014 level.

Many foods experienced a drop in prices from August to September. Grapes lost more than half of their value (down by 59,3%); prices of tomatoes and carrots declined by 25.0% and 15.7% respectively.

In spite of the overall downward trend, prices of some products increased compared to the previous month. Thus, cabbages added 39.6%, followed by peaches, whose price increased by 30.9%, and fresh chicken meat – up by 9.3%. Still, most products decreased in prices, applying downward pressure on Retail FPI.

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The Georgian Lari has lost in value during the last couple of weeks, but, perhaps surprisingly, this has not yet translated into higher food prices. According to the latest results of ISET's Retail Food Price Index (FPI), the prices of food staples sold in the main Georgian supermarket chains have actually decreased by 0.6% during the last week of August (Aug 22-29).

This downward trend is mostly driven by the seasonal adjustment in the price of some fruits (e.g. 20% decrease for plums), vegetables (e.g. 7% drop for tomatoes) and cereals (e.g. rice is down by 3%). However, the biggest drop in price was registered for Georgian grapes (down by more than 23%). Such a drop is naturally related to the beginning of grape harvest (rtveli). Rtveli is not yet in full swing, but Georgian grapes have already entered the market, with much more to come in the following weeks.

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ISET PI launched Retail Food Price Index in July 2015. The project is implemented thanks to the cooperation of the largest Georgian retail chains including Carrefour, Goodwill, Fresco and SPAR. While data from the individual retailers is confidential, the average of prices from all stores can be combined to create a general FPI, as well as FPIs for individual products. All of this will regularly be complied and analyzed in ISET-PI’s publications.

What is the Retail FPI?
The Retail Food Price Index (FPI) is a measure of the weakly change in supermarket prices of a basket of food commodities. The basket consists of 33 food products, which account for 75% of food spending of an average Georgian household.

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