In May, prices across the 17 analysed product categories rose by an average of 3.4% year on year in retail stores. This marked a further slowdown from April, when everyday shopping costs increased by 3.7% annually, and from March, when they rose by 3.8%. Food prices alone increased by 2.4% year on year, following stronger rises earlier in the year. The figures also suggest that the armed conflict in the Middle East has not pushed prices up as sharply as market experts had expected.
According to the latest Retail Store Price Index report, prepared by UCE Research and WSB Merito Universities, prices of food, non-alcoholic and alcoholic beverages, as well as other goods such as household chemicals and children’s products, increased by an average of 3.4% year on year in May. Price growth had been higher in the preceding months: it stood at 3.7% in April and 3.8% in both March and February.
Dr Piotr Arak, Chief Economist at VeloBank, believes the results point to a clear disinflationary trend.
“This is a lasting and gradual slowdown rather than a one-off deviation. Importantly, according to Statistics Poland, CPI inflation stood at 3.1% year on year in May. This was significantly below the market consensus of 3.7%. UCE Research’s retail data are consistent with this reading. Prices in stores are still rising, but the pace of growth has clearly weakened,” Dr Arak noted.
The slower pace of price growth in May surprised Marcin Luziński, an economist at Erste Bank. He had expected the trend to move in the opposite direction. Instead, food prices recorded a larger decline in the annual rate of price increases than anticipated.
According to the report, food prices rose by an average of 2.4% year on year in May. The increases had been slightly higher earlier this year: 3.3% in April, 3.2% in March and 3.4% in February. Dr Robert Orpych of WSB Merito University believes that the food reading is even more significant than the overall result. In his view, a category that had driven inflation for years has now become a stabilising force.
“Several factors are working at the same time. First, agricultural market prices are normalising. Second, there is intense competition among discount retailers in staple products, which are the easiest for consumers to compare across chains. Third, there is a statistical base effect. May 2024 was a period of relatively high food prices,” Dr Orpych explained.
Dr Anna Motylska-Kuźma of DSW Ideis University stressed that the current slowdown is particularly important because it cannot be explained solely by statistical effects or a high base of comparison. According to Statistics Poland, food and non-alcoholic beverage prices fell by around 1.0% month on month in May, making this one of the biggest surprises in the latest inflation reading. On an annual basis, they were only 0.5% higher.
“This shows that we are dealing not only with slower price growth, but also with a temporary price correction in some food categories. Several factors may have shaped this market picture at the same time. Competition between retail chains remains strong, while retailers have limited ability to raise prices when consumers are highly price-sensitive. Supply conditions have also improved in some food categories, especially seasonal products. Moreover, import costs have remained relatively stable, supported by a relatively strong zloty,” Dr Motylska-Kuźma said.
Looking at all the categories analysed, the pace of price growth continued to decline. Food inflation itself is now below the overall CPI inflation rate reported by Statistics Poland. Dr Robert Orpych noted that food prices are currently increasing more slowly than the rest of the retail basket because they are particularly exposed to price competition.
Retailers are well aware that consumers pay close attention to the prices of bread, milk and meat. It is precisely in these basic categories that competition between chains is most visible.
“The fact that food inflation is below CPI reflects the broader composition of the Statistics Poland basket, which includes a wider range of goods and services, some of which have recently become more expensive at a faster pace. The food market itself, however, has slowed amid abundant supply and intense competition among discount retailers. This is particularly positive news for lower-income households, for which food accounts for a significant share of total expenditure,” the WSB Merito University expert said.
Dr Mariusz Dziwulski, an analyst at PKO BP, observed that the conflict in the Middle East has so far not had a major impact on food prices, although increases have been visible in the vegetable oils market. He pointed out that agricultural markets in the second quarter remained under the influence of high global supply, resulting from relatively strong production growth in the 2025/26 season.
“We were concerned that tensions in the Middle East would clearly accelerate inflation through fuel and energy channels. However, the CPN programme, which reduced fuel prices by around PLN 1.00–1.20 per litre, dampened inflation expectations. In addition, fuel prices fell by 0.1% month on month in May. At the same time, second-round inflation effects, meaning the pass-through of higher energy costs into other goods, have not materialised to any significant extent. Of course, the pressure has not disappeared,” Dr Arak concluded.
