Price war, grocery | Warns against price gouging: – The last thing we need

Grocery chains, especially low-priced chains such as Kiwi, Extra (Coop) and Rema 1000, are increasingly characterized by campaigns and price wars. But not the right kind, says the NFF.

– This is the last thing we need, it is not good, says the head of the National Football League, Tony Torgersen.

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Three Grandiosa Prize Wars

In just over six months, there have been three price wars over Grandiosa Pizza.

– A price war over unhealthy alternatives, like frozen pizza, is the last thing we need in a situation where many of us are overweight, says Torgerson.

Before Christmas, the price has been reduced from 59.90 to 35.90 in the low-priced Kiwi, Extra and Rema 1000 chains.

In January, the price war broke out again and Grandiosa's original price dropped to $29.90.

In April, there were campaigns again, and the price was reduced to NOK 20 and NOK 86.

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Seven out of ten Norwegians are overweight and obese, which puts them at risk of developing serious diseases. As consumers, we need help to make healthy choices, says the National Association's Torgersen.

“We don't need price wars that make unhealthy things cheaper and easier to choose from,” she says.

On Thursday 6 June, Nettavisen and Amedia are organizing a discussion on food and health It can be followed in an hour-long webcast.

Strongly increase sales

There is no doubt that price is the deciding factor as to what we choose to buy in the store.

When the price on the Grandiosa was reduced in mid-January, sales increased sharply. In a five-week period, Orkla sold 3.3 million Grandiosa pizzas.

This is 1.2 million more than in the same period of the previous year. This means a significant increase in sales of 36 percent.

Price is one of the things that influences our choices the most, so when unhealthy food like frozen pizza becomes too cheap, we eat more of it, Torgersen says.

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– It also means that unhealthy food replaces healthy food, so the sum here is harmful to our health, she said.

In this way, unhealthy price wars have a double negative effect.

Unhealthy goods dominate

Torgerson believes that unhealthy products often characterize price wars and promotions in stores. At Christmas and Easter, for example, the emphasis is on chocolate and sweets. At Easter time, for example, the price of the small commodity fell to NOK 59 per kilo.

Price wars over snacks are the ones that have the most direct impact on children, and so grocery chains should avoid them, says Torgersen.

Now that it's summer, barbecue food is definitely dominating advertising campaigns. The main focus is on meat. But there are also examples of fish and vegetable price wars, but there are very few of them, according to the NFA.

In August last year, low-priced chains reduced fish prices by about 20 percent for a period. In January, chains also tend to offer price promotions on green and healthy foods.

The price wars we want more of are the ones over healthy alternatives, says Torgersen.

“We see that when grocery chains choose to compete on discounted fish or vegetables rather than pizza and desserts, merchandise sales should receive a 30-40 percent larger increase,” she says.

– He does not receive attention in the media

The Grocery Chain Industry Organization has a slightly different take on this issue.

– Suggesting that there is little price war on health products is simply not true, says Benedik Solom-West.

He is the manager of the grocery branch in Virki, where most of the retail chains are members. Whist claims that there are more healthy price wars than many people think.

However, it doesn't get the same amount of attention in the media when chains engage in a price war over raspberries, blueberries or fresh salmon – which is a real shame, he says.

“But price wars happen here too, and it drives down prices for consumers, which I think most people appreciate,” West says.

He also points out that chains regularly offer discounts on healthy products such as fruits, vegetables, fish and organic products. Among others, Extra, Kiwi and Rema 1000 all offer fixed discounts on fruits and vegetables of between 10 and 15 percent.

Competition among Norwegian grocery chains is fierce, and the chains compete daily with offers within a number of product categories, including healthy foods such as fruit, berries, vegetables and fish, says industry director Benedik Solom West.