As of July 2025, inflation is reported at 2% in the Eurozone, the US Consumer Price Index came in at 2.7%, while the figure in Hungary was 4.3%. Although the exact figures differ, the commonality is that, according to the wisdom of the crowd, “actual” inflation is higher than claimed by official reports. Online message boards and Reddit have numerous examples of actual products getting more expensive than suggested by inflation. Even our blog had a post highlighting such a price development. However, there are factors that can easily explain this phenomenon.
First, statisticians may track the price of different goods than what individuals consume. Inflation is calculated based on the price changes of a fixed basket of goods that the average citizen may purchase. This basket ensures that prices are comparable from period to period, but the contents likely differ from what you purchase on a regular basis. Changes to contents of the basket are also relatively infrequent, so it can potentially miss a hot new product category.
Second, the representative bias might be at play. Inflation was significantly higher in the 2021-2024 period than before, across the globe. However, the current levels are in fact comparable to pre-2020 values, but one can always find a product or product category whose price skyrockets. Focusing on the standouts can distort how we perceive the average.
Third, the average, or “normal” price range is disappearing. Even if the standard product category still exists, current revenue growth in the retail sector is driven entirely by budget and premium categories. While budget goods are sold at either cost, or even at a loss to drive customer demand, premium products are clearly positioned so high that they drive growth despite lower sales volume.
Finally, we, as consumers, are often happy to pay a premium, if we feel that the product is above average. Visible quality cues, scarcity (limited runs), expert or influencer endorsement, and even co-creation with users all lift perceived value and lower price sensitivity. With durables, the effect is stronger: a pricier car or appliance feels safer, lasts longer, and signals status, so trading up feels rational. Add good-better-best lineups and decoy pricing, and many shoppers substitute into higher-margin tiers even when a cheaper option would do. In other words, prices “go up” through mix, not necessarily through the measured inflation of like-for-like items.
In sum, prices feel higher even when inflation stays modest because the index measures a fixed, quality-adjusted basket while our purchases change and we notice standout increases. The market has polarized: budget items pull traffic at cost, premium tiers carry margin, and influencers and scarcity cues push shoppers to trade up, especially for durables. Average selling prices rise through mix and add-ons, not through like-for-like price increases, so receipt totals climb while headline inflation stays low.
Barkó Tamás
Borítókép: unsplash.com
