Economics professor at the Norwegian School of Economics (NHH), Tor Wallin Andreassen, believes that both customers and politicians are upset by the price changes in the grocery industry in recent days. – It borders on the comical, says Andreassen. – The consumers, that is you and I, have lost their footing when it comes to what a liter of milk costs now. He does not believe that the reversal of the announced price jump will last long. Prices will rise again because of the increased costs, is his prediction. – These costs must be captured in the prices. The only question is how they can get up to that level. No one benefits from the industry running at a loss. Now it may be that the prices will rise gradually over time until the summer. Because they have to cover these expenses, he says. Economics professor at the Norwegian School of Economics (NHH), Tor Wallin Andreassen. Photo: CHRISTIAN LURA / news – Directly concerned In recent days, grocery prices have skyrocketed, only to be dumped again. Both Rema 1000 and Coop Extra chose to set the prices on 1 February. news’s own survey then showed that Coop Extra on average raised the goods by 10 per cent in the sample news checked. Rema increased prices by 8 percent. However, the competitor Kiwi chose to keep the prices unchanged. On Thursday, Coop and Rema announced that they were lowering their prices to what they were before the end of the month. – I am directly concerned, because they seem to engage in self-harm. – When I use the word self-harm, it is because this opens the door to dissatisfaction from politicians and consumers, says Andreassen. – Loses money every day Coop Norge’s communications director Bjørn Takle Friis tells news that Thursday’s downward adjustment of prices was something the chain could not strictly afford. – We cannot afford it. It has enormous economic consequences. We lose money every day, but we have to do it. If not, we will lose customers, and in any case we cannot afford that, he says, and points to increased costs and high prices from suppliers. Category and purchasing director Line Aarnes in Rema 1000 Norway writes in an email to news that almost 80 percent of the chain’s costs come from purchases from suppliers. – When the suppliers increase the prices to us, we will unfortunately have to increase the prices to the consumer. We have been and are in a time of a global price rise that has hit everyone, says Aarnes. Torberg Falch, professor at the Department of Social Economics at NTNU. Photo: Therese Lee Støver / NTNU But on Thursday Rema chose to dump the prices again. – We must be the cheapest in the country for groceries, so we only had one choice and that was to cut prices. – Weak competition Torberg Falch, professor at the Department of Social Economics at NTNU, for his part is not worried about declining profitability in the grocery industry. He is most concerned with what he believes is a lack of competition in the industry. – What we have seen lately indicates that there is weak competition. Weak competition leads to weak efficiency and high profits for the owners, he says. – We see, among other things, that this industry runs a fierce advertising business for something that is only about price, and this indicates that there is a very large profit. We also see that contracts are entered into at the same time for all players, which also indicates weak competition. This is to the advantage of those who own the grocery chains and not to the advantage of us as consumers, he concludes. Customer Kari-Anne Røisland believes that consumers benefit from the competition. Photo: news He emphasizes that Coop stands out in that the ownership is different from its competitors. The chain pays a certain percentage back to customers who are members of Coop. – So there is a slightly different way of distributing the profit than the other two large chains have. He says that people’s wage growth will now largely determine how much prices will increase in the future. – It is important, and then it is an important factor how the agricultural settlement turns out, he comments. Kari-Anne Røisland is one of the grocery customers who has noticed the price manipulations from the store chains. She does the shopping at a Rema store in Oslo. – We do notice that the prices are rising, but then we as customers have to be good at keeping up with the offers that are available. It is a competition which means that if we consumers are on the ball, we will surely find good solutions, she believes. Increased food prices The comparison of food prices and the wage trend says something about whether you get more, less or the same amount for your money. When the development of food prices is higher than the development of wages, it means that food has become more expensive. Both figures are averages for the specified period. Read more about sources and reservations here. How much food prices have increased in the last year, compared to wage development Food Dec 2021 – Dec 2022 Wage development Forecast for 2022
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– They must cover the expenses – news Norway – Overview of news from different parts of the country
