Recently, the Tidö government reduced the VAT on food from twelve to six percent. However, consumers are unlikely to notice much difference, as the reduction is being offset by higher energy prices. This is predicted by Axfood CEO Simone Margulies.

Axfood includes the chains Willys, Hemköp, and Citygross. In its first-quarter financial report, the company shows a slight increase in profit and profitability compared to the same period last year. What stands out is that sales volumes are clearly on the rise.

According to Simone Margulies, the company simply has more customers, and the entire sector is seeing positive volume growth. However, she does not wish to comment in more detail on how sales have developed since the VAT reduction on April 1.

– We find it very difficult to predict what this will mean. Consumers are cautious and still scarred by many years of inflation and rising costs, she told TT.

Rising Costs

When asked whether the industry’s promise that the VAT reduction would be fully passed on to customers still stands, she answers yes and claims that the entire market has managed it very well.

At the same time, she believes the VAT reduction will be swallowed up by rising costs across the entire food industry in the form of higher fuel and energy expenses. This will be reflected at different speeds for different products.

– Some products, like fruit and vegetables, have shorter lead times, while other items have longer lead times, says Margulies.

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