What's happened
Stores are delaying passing wholesale price reductions on olive oil to consumers, despite recent falls in wholesale costs. The price of a 500ml bottle has decreased since 2025 but remains higher than in 2022. Production in Spain is expected to increase this year, which may stabilize prices.
What's behind the headline?
Olive oil prices are not decreasing at retail level despite wholesale costs falling. Retailers are delaying passing on savings because they are capitalizing on consumer resilience and high margins. This strategy is likely to continue until supply stabilizes, which is expected as Spain's production increases this year. The reluctance to lower prices may sustain consumer frustration and impact purchasing behavior. The broader context of inflation and supply chain pressures suggests that retail prices for everyday goods, including olive oil, will remain elevated in the short term. This situation highlights the disconnect between wholesale market trends and retail pricing strategies, which will likely persist until supply levels normalize and consumer demand shifts.
What the papers say
The Independent reports that store prices for olive oil are not decreasing despite wholesale costs falling, with store margins expanding as retailers capitalize on consumer resilience. Sky News quotes Filippo Berio's director Walter Zanre, who criticizes retailers for not passing on savings, citing consumer resilience and high margins as reasons. The International Olive Council indicates that Spain's production has fallen sharply in recent years but is expected to recover in 2026, which should help stabilize prices. Industry experts suggest that retail prices will remain high until supply stabilizes, despite wholesale cost reductions, reflecting ongoing supply chain and inflation pressures.
How we got here
Olive oil prices have risen sharply in recent years due to adverse weather and poor harvests in key exporting countries like Spain. Despite wholesale costs falling in recent months, retailers are not passing these savings to consumers, partly because of high consumer resilience to price increases and ongoing inflation pressures. Spain's production has fallen significantly in 2022 and 2023 but is forecasted to recover in 2026, which could lead to more stable prices.
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Tesco plc, trading as Tesco, is a British multinational groceries and general merchandise retailer with headquarters in Welwyn Garden City, Hertfordshire, England, United Kingdom.