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COST OF LIVING

Cost of living: The things in Switzerland that are getting more and more expensive

With Swiss inflation at its highest level in decades — though still lower than elsewhere in Europe — prices for many goods and services have skyrocketed.

Published: 24 January 2023 16:49 CET
Cost of living: The things in Switzerland that are getting more and more expensive
It's a lot of money but it doesn't go quite as far. Image by cosmix from Pixabay

The Swiss Consumer Price Index (CPI) increased by 2.8 percent in 2022, the number which corresponds to the general level of inflation in Switzerland.
 
While this is lower than the rate across the eurozone, it is the highest value for Switzerland since 1992.
 
This rate is an average value for the prices tracked by the CPI, which include all goods and services purchased by households in Switzerland.
 
To see exactly which goods became more expensive, and by how much, Moneyland consumer platform analysed relevant data from the Swiss Federal Statistical Office (FSO).
 
The results were divided into two groups: one focusing on 12 general categories, and the second listing a specific breakdown of individual products.

Let’s look at the general one first.
 
“It is important to understand that statistics are not based on individual products. The FSO calculates the average inflation for certain product categories,” according to Ralf Beyeler, Moneyland’s finance expert.
 
Most impacted by price increases were the household goods and services category.
 
This includes products such as furniture, tools, and home appliances, with prices increasing by 5.7 percent in this group.
 
Next is transport (5.3 percent) housing and energy (4.2 percent), as well as food and non-alcoholic beverages (4 percent).

What about specific products and services?
 
By far the biggest hike — nearly 70 percent — is in the price of wood pellets, followed by gas (68.5 percent). The latter is used to produce electrical power, which explains the huge increase in price of electricity in 2023.

READ MORE: Swiss government confirms ‘sharp increase’ in electricity prices
 

The price of wood pellets soared. Photo: Pixabay

A lesser (though still substantial) hike can be seen in heating oil (37.8 percent), as well as in airline fares (33.8 percent) — in other words, services that rely on energy sources.
 
However, airlines may also have other reasons to raise their prices.
 
“The costs of kerosine make up a large portion of the ticket price,” Beyeler said. “But it is also possible that airlines are trying to raise their margins. After the difficult years of the coronavirus crisis, they are likely trying to earn more money again.”
 
What about food?
 
Margarine and cooking oil became 23.5 percent more expansive — by far the biggest price hike in the food category — followed by other cooking oils (excluding olive oil), at 16.8 percent.

Next are eggs (14 percent), various vegetables (up to 10 percent), butter (9.5 percent), poultry (8 percent), yogurt (7.9 percent), fresh fish and breakfast cereals (7.8 percent), sugar (7.1 percent), as well as bread and other baked goods (6.8 percent).

 Bread is more expensive too.Photo: Pixabay

The (relatively) good news is that meat, which is usually pricey in Switzerland, experienced lesser price hikes, becoming ‘only’ 2.5 percent more expensive, on average.
 
In fact, the price of pork even dropped by 0.3 percent.
 
Other product categories became cheaper as well.
 
For instance, price of rental cars and car-sharing services dropped substantially by 23.8 percent. Landline communications (fixed network) is now 15.7 percent less expensive, personal computers cost 10.7 percent less, while mobile telephone package deals decreased by 7.9 percent, and TV sets by 4.5 percent.

READ MORE: EXPLAINED: 8 ways to save money on your groceries in Switzerland

What lies ahead price-wise?
 
The year is still young and it is difficult to look too far ahead.
 
But this is what we know so far:
 
The price of electricity, as well as healthcare premiums, will remain at their current, high level until the end of 2023 at least.
 
The price of other goods and services will depend on the evolution of the war in Ukraine, as well as inflationary trends.
 
Switzerland’s central bank’s forecasts a 2.4-percent inflation rate this year, so we may possibly see lower prices for consumer goods this year.
 
 READ MORE: EXPLAINED: Why Switzerland’s inflation rate has stayed low compared to elsewhere

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SHOPPING

REVEALED : Are ‘discount’ supermarkets in Switzerland really cheaper?

Lidl, Aldi and Denner claim their prices beat those of large Swiss retailers. But is this really the case?

Published: 18 April 2024 11:40 CEST
Updated: 1 May 2024 06:35 CEST
REVEALED : Are ‘discount’ supermarkets in Switzerland really cheaper?

Common consumer goods (except one) are typically more expensive in Switzerland than in neighbour countries — sometimes by much.

This includes food.

READ ALSO: Why Switzerland is the most expensive country in Europe

That is especially the case of largest Swiss chains, Migros and Coop, while Denner, Lidl, and Aldi say their food prices are significantly lower.

To find out whether this claim is actually true, journalists from RTS public broadcaster’s consumer programme went shopping in each of these supermarkets. 

They purchased the same 30 products in each of the five supermarkets on the same day, to ensure that the price comparison is as accurate as possible.

Not what you’d expect

In each of the stores, the investigators purchased only the lowest priced items from the supermarkets’ budget lines.

It turned out that most money was spent at Denner, widely considered to be one of the lowest-priced supermarkets.

The total for the 30 items came to 181.67 francs — more than was spent at the country’s more expensive stores, Migros and Coop, where identical basket of goods cost 170.37 and 167.82 francs, respectively.

(That, in itself, is surprising as well, because Migros typically has lower prices than Coop).

As for the other two supermarkets, these purchases cost 166.59 francs at Aldi and 162.05 at Lidl.

So the difference in price between Migros and Coop versus Aldi and Lidl is minimal. But what is even more surprising is that the cost of groceries at ‘cheap’ Denner is actually highest of the lot, by between 11 and nearly 20 francs.

Migros and Coop performed quite well in the comparison survey because most of the items purchased in those stores came from their budget lines, M-Budget and Prix-Garantie, respectively, both of which were introduced to compete with Aldi and Lidl.

But how important is price? Patrick Krauskopf, a professor of anti-trust law, told RTS: “German, French, English, Spanish and American consumers pay a lot of attention to price. In Switzerland, consumers place more emphasis on quality of service. Price is almost secondary.

“Distributors have realised this and have stopped competing fiercely on price.”

Big versus small

While this particular analysis focused on supermarket chains, another survey, conducted at the end of 2023, looked at prices in small grocery shops. 

Common logic has it that it is cheaper to shop in supermarkets than a local corner store, because big retailers purchase products in large quantities, which means lower prices for consumers.

However, prices in some local shops were found to be “up to 30 percent cheaper than Migros and Coop.” 

The reason is that in order to cut costs, small grocers may buy their products from the most cost-effective suppliers, a tactic which includes importing some items.

Another reason for lower prices is that unlike major supermarkets, which ‘pretty up’ their stores for better presentation of products, these small retailers are ‘no-frill’ shops. This means little money is invested in décor, so there are no extra costs to pass on to consumers.

 READ ALSO: Why it might be cheaper to avoid the big supermarkets in Switzerland
 

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