Grocery shopping in Austria is notably more expensive than in neighboring Germany, with prices averaging up to 20% higher, according to a study released Thursday by the Association for Consumer Information (VKI). Cheaper prices compared to Germany are a rarity, the VKI noted, attributing the disparity to Austria’s highly concentrated retail market. The country’s four largest supermarket chains control 95% of the market, paired with the highest supermarket density in the European Union.
The VKI’s analysis revealed that prices for basic goods like milk products showed particularly stark differences. For example, plain yogurt, in both budget and organic categories, costs 50% to 70% more in Austria. While organic butter is slightly cheaper by 3%, regular butter is 17% more expensive. A liter of whole milk costs 20% to 30% more than in Germany.
Price differences extend beyond dairy. Entry-level pasta products are 25% more expensive in Austria than in Germany. Comparisons with Italy showed even wider gaps, with pasta in Italy costing about half as much as in Austria. However, the VKI cautioned that direct comparisons with Italy are limited due to differences in product availability and market overlap.
For the November issue of Konsument, the VKI analyzed prices for approximately 200 items in supermarkets near the Austrian, German, and Italian borders. The study compared prices across similar product categories and retailers, including Lidl Austria vs. Lidl Germany, Hofer vs. Aldi Süd, Spar vs. Globus, and Billa+ vs. Edeka.
Market Structure Key to High Prices
The VKI attributes Austria’s higher prices primarily to its high market concentration rather than other factors like labor costs, store density, or topography. The lack of competition drives prices up, the VKI argued. They called for greater price transparency, suggesting that mandatory reporting of retail prices to an independent body could help create a public database or app to promote fairer pricing.
Austria’s supermarket density—60 stores per 100,000 residents—leads the EU, compared to 40 stores in Germany and just 28 in Italy and France. This density, while convenient, can also act as a barrier to new market entrants, reinforcing the existing market concentration. Additionally, suburban supermarkets with large parking lots contribute to Austria’s high land use, increasing costs and impacting the environment.
The Retail Association criticized the VKI study as “unreliable,” arguing that it failed to account for factors like promotional discounts, tax differences, and the higher share of organic products in Austrian supermarkets. The association also pointed to the Austrian Federal Competition Authority’s (BWB) 2022 food market report, which indicated functional competition in the country. Similarly, the Austrian Economic Chamber (WKÖ) dismissed the VKI’s findings, citing differences in energy prices, wages, wholesale costs, and the quality and regionality of products as reasons for price disparities.
