VIKA (Nettavisen): On Thursday, Europris presented record figures for the second quarter, figures that CEO Espen Eldal is proud of. Record quarter is starting to become a habit for the listed low-cost carrier. But many companies struggle with higher costs, so it probably also affects the low-price chain?
– We are really hit by what affects everyone else when it comes to cost increases in general. This applies to wage increases and collective bargaining, and rents increase in line with the consumer price index, Eldal responds to Nettavisen when we meet him after an investor presentation in central Oslo.
– We are hit by a lot, but what we do well is that we work with securing some costs. We have secured the electricity price for another two years, so we have low electricity prices for all our stores.
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Big differences
In the second quarter, Europris had an 8.5 per cent increase in turnover for goods under NOK 100, but a 25 per cent decrease for goods that cost more than a thousand kroner. The most expensive items are typically, garden furniture, grills, trampolines.
In the low-price chain, cheap goods account for less than 60 per cent of sales.
– I interpret it as if people are much more careful with investment purchases. It may be natural now that you have other things to spend money on, such as holidays. You may have bought the garden furniture you need and refurbished the kitchen during the pandemic, says Eldal about the development.
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Less in your wallet
Purchasing power is declining this year as a result of high inflation. Combined with higher interest rates, this can lead to a significant decline in what households will have to deal with in the future.
– Do you think that people therefore apply for low-priced goods?
– Absolutely, I think so. People are becoming more price-conscious and want to save where they can, and we are well positioned.
– But you must notice increased purchasing costs from suppliers?
– When shopping, we meet the same as everyone else. We have received price increases from suppliers of paper and groceries, from Orkla, and the local suppliers have increased their prices from this summer.
Double-digit growth
Eldal says the cost increases are very different from product group to product group,
– For some product groups, there has been a double-digit increase, while other groups have not had an increase.
– How much have you increased the prices towards the customers?
– We try to balance, that we increase prices corresponding to what we have received. Then we constantly follow the market. We can not charge higher prices than the competition.
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Get what we need
– Are there any product groups that are in short supply now, partly as a result of the war in Ukraine?
– No, we get the goods we need, and we also experience that the market in general does. There are some product groups that other specialists have that we do not have, who notice this more.
– What do you think will be the biggest challenge for Europris in the future?
– It will be to keep up with the market, and most of the opportunities are still in our hands. We have good control over the flow of goods and have managed well throughout the pandemic. It is about continuing to develop the concept and be relevant to the customers, giving the customers a good reason to come to us.
– And then I think we have to work tougher and tougher with campaigns, Eldal answers.
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Everything else
When asked what are the main competitors of Europris, the answer is “the whole market”.
– For us, it is everything else you spend money on, and there are many skilled competitors in our market as well. We actually fight a little against everyone, both against groceries and other players with a wide range of goods.
Eldal said during the presentation that Europris has done much better than the market during the corona pandemic.
– We have emerged from the pandemic as a much stronger company than we were before, he boasted.
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