(The newspaper online) While prices are rising sharply in Rima and Kiwi, there is a surprisingly small increase of 2.8 percent.
Interpreting that is something Kiwi and Extra strongly disagree with, though Kiwi is still quite a bit cheaper than the Coop series.
Price jump in Grandiosa
Just before the end of the month, when prices are revised upwardsNettavisen checked the prices of 27 groceries in the three discount chains. These are the exact same items we checked a year ago.
The result shows that the price of some commodities has experienced a significant price increase of between 30 and 50 percent:
- grandiose
- Stabburet liver paste
- Previous turkey seasoning
- Super chips with sweet pepper
See the full overview at the bottom of the case
– I noticed that Grandiosa has become a deer. I’m a freshman, and Grandiosa had a cheap dinner. That’s not the case anymore, says Hokun Holmoy. Stop by the Kiwi to do some small business (26).
Kiwi customer Bjørg Engebretsen (67) also notes that some items are getting quite expensive.
– I often buy full-bodied Norvegia fillets. I noticed that its price has gone up. But I really wonder why the prices of some items go up so much, while others don’t.
Some items are actually lowered or left in place. The Nidar Favorite Troika has actually become about 20 percent cheaper in chains. Broccoli and norvegia stand at rest.
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Financial offers with price jumps
Professor Tor W. Andreessen of the Norwegian Business School thinks the results are startling.
– It is not easy to explain that some prices are rising sharply while others are falling. The differences in the cost of making the products are not much different. Wages, electricity and transportation expenses are important, Andreessen says, but it’s the same for everyone.
He thinks the explanation may lie in the way the chains finance their offerings.
Variations are most likely examples of cross-subsidization, where you prepare some products that are not price sensitive, so that you can neglect others in order to attract customers.
Andreassen is backed by grocery expert Odd Gisholt.
Some commodities are rising sharply, while others are stable or declining slightly. Stores need to fund attractive offers, Gisholt says, and then they have to charge extra for some items.
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Strong brands
Gisholt believes that it is no coincidence that commodity prices are rising.
Orkla takes the chance that Grandiosa will stand so firmly in people’s consciousness that people will want her almost no matter what it costs, says Gisholt.
“Grandiosa is a very strong brand name that can obviously withstand a sharp price increase, and I don’t think making pizza has gotten 40 percent more expensive in one year,” says Andreassen.
Rich from selling food
This week, testing by Nettavisen shows that Kiwi is the cheapest right now:
- Kiwi: NOK 966.50
- RIMA 1000: NOK 968.00
- Extra: NOK 987.01
The big change is the price jump from last year:
- Kiwi: up to NOK 123.90
- Rima 1000: up to NOK 125.40
- Extra: up to NOK 25.50
Eric Bergsitter, 76, and his wife are retired and regular customers of Kiwi, which is cheaper now, but 15 percent more expensive than it was a year ago.
– I do not like that. It is no coincidence that the richest people in the country are the ones who sell food. The chains claim they only get three percent of the profits. I don’t think so, says Eric Bergsetter.
Tougher competition
NHH professor Tor W. Andreassen notes that one series stands out.
It’s interesting to see that Extra has come close to taking the lead over the other two. Now it doesn’t make much difference, Andreessen says.
Grocery expert Odd Gisholt thinks the fact that Extra shorts the distance to the cheapest chains indicates that the competition is working.
The fact that Extra cares so much about the other two now shows that competition is fierce. The chains follow one another like shadows, so many prices are identical, Gisholt
There is stiff competition, and Extra has said that they want to grow and be the biggest. Pricing is absolutely key for the Extra, which falls into competitor mode, Gisholt says.
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Kiwi: – additional false start
While the Kiwi and Rema 1000 shopping baskets increased by 15 percent from last year to this year, the price on Extra increased by a modest 2.8 percent. The Kiwis think they know why.
– We recorded last year that Extra raised the prices of goods before the chains received price increases from suppliers. kiwi no. We don’t raise prices until we have to. Because Extra was much more expensive last year, the raise will be less for them this year, says Kiwi’s director of communications, Christine Arvin.
Extra rejects this.
– No, that’s not true. Prices are constantly being adjusted, especially at this time of year. There is no starting point at Extra, we are constantly working to be the cheapest chain, says Harald Kristiansen, Communications Director of Extra, Harald Kristiansen.
Nettavisen’s price test last year showed that the Extra was by far the most expensive.
This is how Strings annotates the results:
kiwi:
About the result: – Kiwi was the cheapest last year, and we are the cheapest this year. It’s always a good idea to have price surveys confirm this, even if they only show a snapshot of a small sample, writes Kiwi’s Director of Communications, Christine Arvin.
About the price hike: – It’s a coincidence that this curve increased more than average. This may be due, among other things, to the fact that individual products were in last year’s campaign. Food prices in Norway increased by 11.5 percent from December 2021 to December 2022. That’s a lot, says Arvin, and adds:
– At the same time, prices in Denmark and Sweden increased by 14.9 and 18.2 percent, respectively. The main reason for the increase is the increase in purchase prices from suppliers. In addition, the entire value chain has increased transportation and packaging costs, not least electricity, and our stores do not receive a penny in electricity subsidies. Even though prices have gone up, our margins are down and we’re making less money than before, Arvin writes.
Rima 1000:
About the result: – We are not satisfied with the result, because REMA 1000 should be the cheapest for groceries in Norway, writes Rema 1000 Communications Director Hege Rognlien.
About the price hike: – There was an increase in world prices last year due to almost three years of pandemic and war in Ukraine. This has led, among other things, to an increase in the prices of raw materials and input factors such as electricity and transportation, which affects the prices we charge from our suppliers. Rema 1000 should be the cheapest grocery store in Norway, she says and points out:
– The bulk of our costs are commodity costs. When we receive a price increase from our suppliers, unfortunately, the price for our customers also increases. We challenge our suppliers to ensure that the price increases we receive are genuine cost increases based on the global price increase. As far as this particular cart is concerned, many items are sold out in January 2022. Among other things, we’ve sale Superchips at $19.90. It’s a campaign we don’t have right now. Rogenlin wrote: We sold some items cheaper than what we bought from the supplier.
additional
About the result: – Extra was recently named the cheapest chain nationwide in a major price survey, a position we have ambitions to retain. The price test is a quick snapshot, showing that there are small differences in a period of the year in which prices are adjusted most frequently, writes Communications Director Harald Christiansen at Coop Norge.
About the price hike: – It is important to remember that for a long time we have been and remain in a state of emergency, with global inflation and uncertainty over access to raw materials providing unpredictable framework conditions. Increases in the prices of electricity, transportation, raw materials and other things affect the entire value chain. This is the explanation for the high prices, and it is important to keep in mind that this is not a phenomenon for Norway. Food prices have risen less here at home than in the European Union and our closest neighbors. Finally, it’s also important to keep in mind that if you look at the evolution of prices over recent years, groceries have gone up much less than the general price increase, Christiansen writes.
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