(The online newspaper:) Food prices have increased by 9.1 per cent in the past year.
Several people have asked whether the prices are just a consequence of increased costs. Or: Could it be that the grocery chains have taken the opportunity to raise prices extra?
A brand new opinion poll conducted by InFact for Nettavisen leaves no doubt as to what most people think.
Great poll
1,161 people were asked this question:
“Do you think the big food chains are raising prices more than necessary to cover the increased costs?”
A whopping 62.1 percent answer “Yes, significantly more than necessary”
In other words: Almost two out of three respondents believe that the grocery chains have increased prices significantly more than necessary.
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24.7 percent – i.e. one in four – answer this: “Yes, a little more than necessary”
In total, 86.8 per cent believe that grocery chains have increased prices slightly or significantly more than necessary.
Only 8.7 per cent believe in what the chains themselves have as an explanation, namely they answer: “No, they increase the prices in line with the increased costs”.
– In a way, people are right
Grocery researcher Ivar Pettersen, in Alo Analyse, believes people are partly right.
– In a way, people are right, but there are few who give up profit voluntarily, he says.
Pettersen believes that it would have been possible for the grocery chains to operate with lower margins, but he emphasizes:
– But there is nothing to indicate that it is extremely profitable to run grocery stores in Norway, says Pettersen.
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The money bins are growing
But at a time when customers’ shopping baskets have become increasingly expensive, the money bins of several grocery billionaires have become increasingly full.
Odd Reitan has built his fortune on Rema 1000. When the tax figures came out recently, it turned out that he has the country’s second largest fortune. A step up from last year. The son, and Reitan boss, Ole Robert Reitan also climbed the list. He has the sixth largest fortune in Norway.
His brother Magnus fell on the list, but that is because he has moved his fortune to Switzerland by transferring shares to his children who live there.
Norway’s largest grocery group is Norgesgruppen, with chains such as Kiwi, Meny, Spar, Joker and a large number of other companies. Here, the anonymous Johannson family are the dominant owners.
The brothers Finn Hartvig, Karl Edvard, Peder Oskar and Knut Sigurd together own just over half the company. And the figures showed that everyone increased their wealth by NOK 1.1 billion each last year.
Dad and chairman Johan Johannson, has the largest shareholding. He had his fortune reduced by a few hundred million kroner in the last year. He is probably managing well, his fortune is NOK 5.1 billion.
Knut Hartvig Johannson (86) helped build up the Norgesgruppen, and is the father of Johan Johansson. Senior currently lives on Snarøya.
– Steadily profitable
Nevertheless, grocery researcher Ivar Pettersen believes that running a grocery store in Norway is not extremely profitable.
He points out that the grocery chains have a margin of only a few percent. This means that for every hundred shillings they sell, they are only left with a couple of kroner.
– If they are to maintain their margins, they must raise prices when costs increase, says Pettersen.
Nevertheless, the contrasts are striking now.
– It has been a lean and difficult year for consumers. But for the industry and grocery trade, it has been as good a year as most other years, he says.
He emphasizes that there will be variations between individual chains and retailers.
– The grocery chains manage in good times and in difficult times, he says.
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He believes that the agricultural policy has made it safe and good to run a shop or food industry in Norway.
– The shielding we have of agriculture in Norway also helps to shield the Norwegian food industry and the Norwegian grocery chains. They are shielded from foreign competition that could otherwise have helped to push prices down, he says.
This is how the chains respond:
Rema 1000: – We shall be the cheapest on groceries in Norway. We compete at the lowest price every day and our business model is to sell large volumes with low margins. Our margins have been fixed at between three and four percent since we established low prices in Norway back in 1979, says category and purchasing director Line Aarnes.
– The absolute largest part of our costs is the cost of goods, so when the suppliers increase the price to us, unfortunately the price also increases in the store. In the same way that when our purchase prices are lower, we take them directly to the customer in the form of a lower price on the shelf, says Aarnes.
Norgesgruppen: – In the last two years, we have had historically high increases in our purchase prices, and our profitability has decreased. This is because costs have increased more than prices. We fully understand that it is difficult for many with the increased prices, says communications manager Kine Søyland.
– Our first priority is to get cost growth under control. In the first half of this year, we had a profit margin of 2.4 per cent, which is low, regardless of whether you compare it with other grocery chains, other traders or companies in other industries, says Søyland.
Coop: – We cannot answer for the other grocery players, but Coop’s chains have not raised prices more than was necessary. Our aim is to provide 2.3 million members in Coop’s co-operatives with good quality products at the lowest possible price, and every year the profit is shared with the members, says communications director Harald Kristiansen.
– We fully understand that it has been a difficult year for many Norwegians and are aware of our responsibility to keep price developments as low as possible. Our margin has been strongly challenged by increased prices for the goods we buy in, in addition to the fact that virtually all operating costs have also increased. Nevertheless, we do everything we can to keep the prices as low as possible for customers, says Kristiansen.
2023-12-17 17:56:40
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