– This is a very smart move on the part of Kiwi, says NHH Professor Tor W. Andreassen.
Kiwi has recently been running campaigns that the chain is the cheapest, and drives prices down. This winter, prices have been “Locked” on a number of brands.
At the same time, Kiwi has started raising prices in recent weeks, 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. This is all advertising for kiwi. “We don’t compromise on price,” Andreessen says.
Here you can see how much prices have risen throughout the spring:
The Kiwi believes that NRK should set a higher advance price for roast beef and ground beef because the prices were lowered from a higher price when NRK checked advance prices.
The worst is that the customer finds out
Norges Group has better profit margins and greater cost control in the value chain of its brands, according to Andreessen.
– The whole logic is to make money on goods that are bought on different terms and contracts than they are usually bought, and get a larger margin. And he says they’re spending more money shifting demand into this category, especially in a period when they generally have tight profit margins.
Tor W. Andreessen Professor of Economics at NHH.
Photo: CHRISTIAN LURA/NRK
The head of Alo Analyze, Ivar Pettersen, believes that price brands can be set up without customers reacting aggressively because the same product is not necessarily available at competitors.
– It’s much easier to find out the cost of a Gilde pack of toppings and compare across stores. But these different brands work differently. Therefore, price comparisons can be trickier, he tells NRK.
Kiwi refers to suppliers
Kiwi’s Communications Director Christine Akvag Arvin told NRK that prices have gone up by less than the rate hike Kiwi has received from suppliers.
Most of the goods on the list are imported goods, and these have seen significant price increases due to the weak krone exchange rate, as well as increased costs for raw materials, energy and transportation, she wrote in an email to NRK.
Kiwi Communications Director Christine Akvag-Arvin.
Photo: Kiwi
Pettersen believes that grocery chains are under pressure to increase their prices because producers have raised prices for the chains.
– The private label supplier may be responsible for the price increase, since there was a sharp price increase at the supplier level that was not recorded at the retail level. He says it may be the supplier is taking it first on its own brands.
Alo Analyze Director Ivar Pettersen believes that food chains will have to raise prices in the future to keep wages the same.
Photo: NRK
Price doubled in one year
As NRK previously reported, stores chose to increase prices for their own brands over other goods last year.
In the past year, among other things, the price of frozen berries, puffed rice, and dried rolls has nearly doubled in price.
Thus, the price difference between private brands and well-known brands is reduced.
For example, the price of First Price 750-gram cornflakes doubled in one year, while the price of Kellogg’s 500-gram cornflakes remained flat.
– They can set prices in the market themselves, because it is seen as a low price brand. So this is a very smart strategy at a time of stress on the kiwi and the grocery industry. It has to be profitable, and that’s one way to make it happen, Andreessen says.
“Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff.”
