– This is quite a smart move on Kiwi’s part, says NHH professor Tor W. Andreassen. Kiwi has recently run campaigns that the chain is the cheapest, and is pushing prices down. This winter, the prices were “locked” on a number of brands. At the same time, Kiwi has started to raise prices in recent weeks, and especially on Norgesgruppen’s own brands such as First Price and Eldorado. – The price strategy is to make money, of course. Under the guise of being the price leader. That’s the whole advertisement for Kiwi. “We don’t give in on price,” says Andreassen. Here you can see how much the prices have increased throughout the spring: Kiwi believes that news should use a higher preliminary price for roast beef and minced meat because the prices were reduced from an even higher price when news checked the preliminary prices. Worse for the customer to discover Norgesgruppen has better margins and more control over the costs in the value chain of its own brands, according to Andreassen. – The whole logic is to make money on goods that are purchased on different terms and contracts than they usually have, and to have a bigger margin. They spend more money on shifting demand to this category, especially in a period where overall they have tight margins, he says. Economics professor Tor W. Andreassen at NHH. Photo: CHRISTIAN LURA / news Head of Alo Analyse, Ivar Pettersen, believes that own brands can be raised in price without customers reacting strongly because the same product is not necessarily available at competitors. – It is much easier to see what a Gilde package of toppings costs and compare it across shops. But these different brands work differently. Therefore, price comparisons can be a little more difficult, he says to news. Kiwi points to the suppliers Communications manager Kristine Aakvaag Arvin at Kiwi tells news that the prices have increased less than the price increase Kiwi has received from the suppliers. – Most of the goods on the list are imported goods, and these have had large price increases due to the weak krone exchange rate, in addition to increased raw material, energy and transport costs, she writes in an e-mail to news. Communications manager Kristine Aakvaag Arvin at Kiwi. Photo: Kiwi Pettersen believes that the grocery chains are under pressure to increase their prices because the producers have increased the prices for the chains. – It may be the supplier of own brands that is responsible for the price increase, because there has been a sharp price increase at the supplier level which has not been recorded at the retail level. It may be that the supplier first takes it out on its own brands, he says. Alo Analyse manager Ivar Pettersen believes that the food chains will be forced to raise prices in the future to keep wages the same. Photo: news Doubling in price in one year As news has mentioned earlier, the shops chose to increase the price of own brands more than other goods last year. In the last year, among other things, frozen raspberries, puffed rice and drying rolls have almost doubled in price. The price difference between own brands and well-known brands has therefore shrunk. For example, First Price cornflakes 750 grams have doubled in price in one year, while Kellogg’s cornflakes 500 grams have remained stagnant in price. – They can set the prices in the market all by themselves, because it is perceived as a low-price brand. So this is a pretty smart strategy in a time of pressure for Kiwis and the grocery industry. They must be profitable, and this is one way of doing it, says Andreassen.
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Price jump on First Price goods at Kiwi – news Norway – Overview of news from different parts of the country
