UBS On-Air: Paul Donovan Daily Audio 'Ending the pricing power fairy tale?'

Swedish supermarkets are cutting food prices, after growing concerns about the extent of (profit-led) inflation. This is not just slower inflation, but outright deflation with price increases and profit margin expansions being reversed. It follows similar moves in Norway last month. If consumers are no longer prepared to live in a pricing power fairy tale, believing the stories retailers tell to justify margin expansion, disinflation or deflation can swiftly follow.