Three-quarters of the companies in the Netherlands indicate that they cannot or hardly pass on higher costs, which have risen mainly due to more expensive energy and raw materials, to customers. In many cases, entrepreneurs are afraid that customers would be more likely to choose competitors if they did raise prices. However, the majority of entrepreneurs indicate that the debt burden has not increased compared to last year, just under 5 percent say that the debt burden is problematic.
This is evident from research published on Monday by Statistics Netherlands (CBS) in collaboration with the Chamber of Commerce, the Economic Institute for the Construction Industry, MKB-Nederland and VNO-NCW. They examined companies with more than five employees that do not belong to the financial sector. For almost 28 percent of companies, the expectation of a worse competitive position is the main reason for not fully passing on the increased costs to their customers.
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At the beginning of this year, more than half of the more than 5,000 entrepreneurs surveyed said that it was hardly or not at all possible to pass on increased operating costs to customers. Now that is 76.1 percent, but CBS chief economist Peter Hein van Mulligen does not want to speak of an increase. “The question in the previous study was different, so the results cannot be compared properly.”
‘Beware of place inflation’
The percentage of 76.1 “puts the discussion about grab inflation in a different perspective,” says Van Mulligen. According to some, research by Rabobank showed that companies raised prices further than inflation necessitates, but according to others, there is not enough evidence for that conclusion.
Statistics Netherlands therefore sees that, in addition to companies that pass on inflation, there is also a large group that cannot. The opposite of grab inflation, in a way. Van Mulligen suggests a new word: “Beware of place inflation.”
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