Rema 1000 Faces Backlash After Sudden Price Surge Post ‘Cheapest Store’ Ruling

Nettavisen recently named Rema 1000 as the cheapest source. But then it was revealed that the items voted Rema 1000 as the cheapest store by the weekend have become very expensive. On Monday afternoon, Rema had an unusually large price increase of 1,000, some items had become more than 50 percent more expensive.

A grocery expert called it treatment of customers, and they believed that consumers cannot trust the stores.

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Strong opinions on Rema 1000 price grip

Nettavisen’s price test showed a historically high price difference between the grocery chains. Rarely has there been such a large price difference between Rema 1000 and Norway’s self-set price holder, Kiwi.

– We are not at all satisfied with this result. We understand that there are two products that make the difference, namely mutton cabbage and lightly salted cod. Those things have actually been changed down by us now, so we are where we should be, said Kiwi in relation to the test.

Kiwi was the most expensive light salted cod in Nettavisen’s price test before the weekend. At Kiwi, the fish cost NOK 27 more per package than Rema 1000 Extra, where it cost NOK 100.

Then, according to Kiwi, the price was adjusted down on Friday. But the price was already set on Monday.

Norway’s self-setting price mechanism then increased the price from NOK 100 per package to NOK 149.50.

The competitors, Rema 1000 and Extra, have done the same. Both have charged NOK 50 for a pack of slightly salted cod. Therefore, it is agreed that the fish should cost NOK 149,50 in all three chains.

The communication consultant at Coop Norge SA, Simen Kjønnås Thorsen, confirms that the price is correct.

– The reason for the price difference on the cod is that it was promoted in the low price market last week, and is now back at the normal price, as in the rest of the market, he says.

Coordinated prices at Kiwi, Rema 1000 and Extra

But it is not only the fish that the chains are hitting to make it more expensive for consumers. The same applies to paprika and popcorn, which were definitely the cheapest Rema 1000 in the price test.

All chains except Extra have increased the price of popcorn, from NOK 14.90 to NOK 24.90. The same goes for paprika.

– Since all the chains change their prices above we can imagine how they are doing. The goal is to always be as similar as possible on most items. That is what the Norwegian Competition Authority feared, says Bent Sofus Tranøy, professor of political science at Høgskolen i Inlandet and Høyskolen Kristiania.

In August Kiwis became the owner Norgesgruppen, Rema 1000 and Coop fined billions for illegal price collusion. At the same time, it was forbidden to systematically scan products in the stores of competitors.

– Can’t believe it’s a coincidence

The head of the Business Committee and parliamentary politician for the Center Party, Willfred Nordlund, believes that this shows that the battle between grocery chains is only a battle to be the cheapest.

– If price tests show us anything, it is that there is little difference in price between the big chains. They have to earn as much as they can, he says.

He explains that ultimately what grocery chains compete for is market share and customer loyalty.

– No one has to believe that a grocer is going to work to make as little money, or that the grocer is concerned with giving the consumer the lowest possible price, says Nordlund.

He does not criticize the merchant for running a shop.

– But the reliable price cooperation of the chains is a big challenge for the market and for us as consumers. I don’t think it’s a coincidence that the shops change the prices in step.

Cut first

Kiwi communications director Kristine Aakvaag Arvin says Kiwi launched VAT cuts on around 150 fish products from September 16 to October 13.

– The competitors followed suit, and Kiwi succeeds in starting another healthy price war, she says.

She says that when they were informed towards the end of last week that competitors had reduced the price of cod with light oil even lower, they immediately changed the price of this product down.

– We did this to keep the promise we gave to our customers: If we find a product that is cheaper, we reduce the price accordingly or even lower. Friday afternoon, Saturday and in all shops open on Sunday, cod with a little salt was this price, says Aakvaag Arvin.

At opening time on Monday, the VAT cut on fish had expired. The prices then went back to where they were before the campaign started. Therefore the price of the cod is lightly salted as it was on September 15.

– How do you explain that the three have set the price of the product at the same time?

– We cannot answer for the other chains, but our fishing campaign lasted at least until October 13, as mentioned. It was clearly stated in customer magazines, online and on posters in stores, she says.

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– Analyze the competitive situation

– Competition in the grocery industry has been so bad that people have been paying very high prices in Norway for several years, says the deputy leader of the Left Socialist Party (SV), Torgeir Knag Fylkesnes.

He believes that the money ends up with the leaders in the grocery market, while the customers and the farmers lose.

– Even after receiving billions in fines for illegal price collusion, we have not seen the chains take responsibility for improving the chaotic competitive situation, says Knag Fylkesnes.

He says the chains have far too much power to determine prices.

– SV, for example, has suggested that the chains should not be able to sell their own brands, as it gives too much control over which products are in the stores. It is a good place to start to give less power to Rema, Coop and Norgesgruppen, he says.

Knag Fylkesnes believes it is urgent to do something about high food prices in Norway.

– When we know that people are already struggling to pay their bills and interest costs, it is sad that food has also become much more expensive in recent years. They hit with the minimum before, he says.

Expect them not to take advantage of the situation

The Conservative Party’s food policy spokesperson, Lene Westgaard-Halle, believes that better competition is needed in the entire food value chain.

“Unfortunately, the government cannot do anything about the competitive situation, so we expect grocery players to be aware of their responsibility and not take advantage of the situation,” she said.

Westgaard-Halle says it is not unusual or illegal for stores, regardless of industry, to follow each other on price to compete with each other.

– Any collusion on price will be a breach of the Competition Act. We have already regulated this by law, and it is up to the Competition Authority to investigate any violations, she says.

She explains that the shops often run campaigns on different products that are beneficial to customers who are price conscious.

– This, together with different costs in the value chain, means that prices go up and down, she says.

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