Serbia’s government has implemented a limit on retail margins, capping them at 20 percent for 23 groups of essential food products. The move aims to curb rising prices, but it has sparked debate about whether it benefits consumers.
In retail, a margin is the difference between the purchase price of goods and the selling price. This gross margin is not pure profit, as it must cover operating costs like wages, transport, rent, and taxes. After these costs, the net profit margin is calculated.
Data from Serbia’s National Bank and Statistical Office show that retail margins have increased in recent years. In 2022, margins rose 36.6 percent compared to 2019, with the net profit margin for large chains around 2.8 percent. Research covering 31 key food products indicated an average gross margin of 14.9 percent among the largest 20 chains, which account for over 80 percent of the market.
Retailers, including Delez (operator of Maxi supermarkets), argue that inflation, high production costs, and other operational expenses are the main drivers of food prices, not excessive profit. Delez reported a net profit margin of 4.4 percent in 2024, meaning 4.40 dinars of every 100 dinars spent remained as profit after covering all costs.
While the government maintains that price caps protect consumers, retailers warn that limiting margins may require significant operational adjustments and could impact investment, logistics, and employment.
