The retail sector of the domestic food market is a key stabilizer of household purchasing power this season.
According to the latest analytical data from the Association of Omnichannel Retail Companies (AKORT), a steady decline in the cost of «first price» products was recorded in the first half of 2026.
Out of 25 key socially significant food categories, prices have dropped by 11 positions compared to the beginning of the year, and a negative trajectory has been recorded in 19 categories year-on-year.
The overall price decline in the socially significant basket of products year-on-year was a significant 10.4%.
Deflation Leaders: Pig Farming Triumphs and the Decline of the «Borscht Set»
Within the retail sector, the most severe price correction since the beginning of the year occurred in the meat and grocery sectors.
According to AKORT, the leading price declines were:
Pork, which fell by 25.3% due to high domestic production volumes;
Chicken eggs, which saw a 17.6% decline;
Cereals and grocery products, which saw rice fall by 16.4%, millet by 13.4%, butter by 13.5%, while buckwheat and flour fell by 8% and 6.7%, respectively.
A year-on-year analysis (June to June) shows that open-field producers contributed the most to the deflation.
Due to record harvests in recent years and the high level of product preservation at elevators, borscht-based vegetables saw a dramatic drop in retail prices: potatoes fell by 36.9%, beets by 35.6%, cabbage by 32.8%, and onions by 26.1%.
Only bread, frozen fish, and whole broiler chickens saw slight price increases within the overall inflation rate.
The key tool for containing the cost of fruit and vegetable products was the transition to a system of long-term agricultural contracts.
Direct contracts allow holding companies to accurately forecast sales volumes, and the development of regional agricultural aggregators has opened up access to the shelves of national chains for small farms whose small quantities were previously unavailable for retail pickup.
Negative Margin: Retail Goes into the Red for Traffic
A unique feature of the first half of 2026 was the unprecedented contraction of retail chains’ margins.
The average retail markup on a basic pool of socially important products was a symbolic 1.2%.
Furthermore, the trend was downward: while in April the markup reached a historic low of 0.5%, in June it fell into deficit territory for the first time in recorded history, becoming negative – minus 1%.
In fact, in 13 out of 25 categories, «first price» products were sold by retail chains below cost, at a loss to their balance sheets.
Carrots (-22.1%), cabbage (-12.6%), buckwheat (-6.4%), and seasonal apples (-4%) were sold with a negative margin.
Retail operators are taking this step deliberately, using low-cost basic products as a «magnet» to attract customers to their stores, hoping to offset operating costs with premium-priced ancillary products.
Meanwhile, net profit in the chains’ final markup is only 2-3%, and this markup itself finances colossal logistics infrastructure, staff salaries, and distribution center rentals.
This is why the professional community harshly criticizes the periodic State Duma initiatives to impose mandatory price freezes or legislatively limit trade margins through state subsidies.
Artificial intervention will disrupt market incentives, deprive chains of investment potential for product range expansion, and inevitably trigger a shortage of raw materials.
The only effective mechanism for long-term price containment remains the development of healthy competition.
Conclusions for strategic planning in the agro-industrial complex
The current 10.4% drop in retail prices is a severe challenge for raw material producers.
Retail chains have managed to reduce markups to negative values, but they will continue to exert severe price pressure on processing plants and farmers, demanding lower selling prices for contracts for the new season.
With retail operating at the margins of profitability, it’s pointless for agricultural holdings to expect a sharp increase in wholesale purchase prices.
