Declining purchasing power or not, healthy food remains a basic need

In the Netherlands, the third Tuesday in September equals Prinsjesdag. Each year, on this particular day, the Dutch government takes the time to analyse the economy and present its financial plans. It is a fact that the purchasing power is declining. But to which extent? Prominent has looked at the statistics and concludes that the current economic situation might not be as bad as it looks. How do Dutch consumers approach the drop in purchasing power and how can we – and the Dutch government – add more value?

Current purchasing power at similar level as in 2015

Dutch consumers are taking a beating. This is what the national newspapers are saying, even though this statement is only partially true. When you compare the current economic situation to the one of two years ago, our purchasing power has indeed declined. But when you look at the diagram created by the CBS, you can see that we are now at the same level as we were back in 2015. In fact, the purchasing power has – in general – been steadily increasing since 1990.

Dutch general standard of living remains high

The pain that most Dutch consumers are currently experiencing is linked to several factors. For example, the energy prices that have been steadily increasing in the last months. As well as the petrol prices breaking record after record. In addition, haven’t we started perceiving our high standard of living as ‘normal’ in recent years? Allowing a general Dutch household to keep consuming endlessly and having everything – from frequent visits to bars and restaurants and flying to far destinations – within reach?

Healthy food remains a basic need

Maybe the current economic situation should be considered a reality check. One that helps us go back to basics. And forces Dutch consumers to make conscious choices and determine what really matters. Healthy food for example, is still a basic need. Fortunately, healthy products remain accessible for most Dutch households. Sometimes through adjusting their spending habbits.

A current trend is that pricier specialty shops and restaurants are visited less often, while (discount) supermarkets are welcoming more shoppers. Not in the least due to the price promotions which they are communicating regularly. And once inside the store, consumers no longer carelessly throw everything in their shopping cart. Instead, they make conscious purchasing decisions.

More realistic (selling) price of products

It remains a fact that food has become more expensive. But not with the 40% that is sometimes mentioned; according to LTO Netherlands, food has generally increased in price by 10%. A logical consequence of the increasing production costs affected by higher prices. Are we moving towards a more realistic (selling) price for food products? Because on a global scale, Dutch consumers still do not pay a lot for their food. And when you consider that only 8% of our total monthly expenses goes to food, a price increase of 10% is still manageable for most households.

From healthy products to a healthy economy

Still, the Dutch government can play a role in lighting the load. Think of limiting the VAT on healthy products such as fresh fruit and vegetables. Not only does it help keep a healthy lifestyle within reach of all consumers, including those with a smaller budget. But it is a simple yet smart investment. As good health is the basis of a productive life and ultimately, of a healthy economy.

Growers United / Prominent is looking ahead based on well-informed insights. Curious to know which role we expect healthy food to play? Do not hesitate to get in touch with Wim van den Berg of Growers United / Prominent: w.vandenberg@growersunited.nl or +31 (0)6 5756 4346.

Prominent is a brand of Growers United UA. This organisation is responsible for the sales, marketing, and quality control of the product.