Supermarket chains cut prices in Poland following VAT suspension

Retail

Lidl and Aldi have become the first supermarket chains in Poland to announce that they will lower the prices of thousands of their products in response to the government's decision to suspend VAT (value-added tax) on food, gas, and fertilizer as a way to soften the blow of soaring inflation, according to a report by Notesfrompoland.com.

After announcing the tax cuts last week as part of the government's latest "anti-inflation shield", Prime Minister Mateusz Morawiecki warned that for them to translate into lower consumer costs – estimated at PLN 45 (EUR 10) per month for the average household – retailers would need to lower their prices commensurately. In response to the call, Lidl has announced that it will cut the price of 2,000 products.

The chain did not publish a detailed list but said that cheaper products would include milk, butter, cream, bread, apples, carrots, and potatoes, as well as garden soil, fertilizers, and plant care products. The chain also noted that, according to an ASM Sales Force Agency report published in December, the price of a basket of basic goods at its stores dropped by 5.13% last year despite growing inflation.

Another discounter, Aldi, has followed suit, announcing that it would lower the prices of around 2,000 products from 31 January, a day ahead of the VAT cut. Experts have also warned that, after the VAT cuts expire (which is currently due to take place after six months), inflation could be driven up to over 10%, reported Radio ZET.

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