(Electronic newspaper:) Food prices rose by 9.1 percent last year.
Many people have wondered whether the prices are just a result of increased costs. or: Could grocery chains have seized the opportunity to raise prices further?
A brand new poll conducted by InFact for Nettavisen leaves no doubt about what most people think.
Great poll
1,161 people were asked this question:
“Do you think major food chains are raising prices too much to cover rising costs?”
At least 62.1 percent responded “Yes, too much”
In other words: Nearly two in three respondents believe grocery chains have raised prices Much more it is necessary.
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24.7% – that is, one in four – answered this question: “Yes, a little more than necessary.”
Overall, 86.8 percent believe grocery chains have raised prices slightly or significantly too much.
Only 8.7 percent believe in what the chains themselves offer as an explanation, i.e. they answer: “No, they increase prices in line with increasing costs.”
– In a way, people are right
Grocery researcher Ivar Petersen, at Alo Analysis, thinks people are partly right.
– He says: “In a way, people are right, but there are few who willingly give up profit.”
Petersen believes that grocery chains could have operated on lower margins, but he asserts:
But there is no indication that running grocery stores in Norway is very profitable, Petersen says.
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Funds grow
But as customers’ shopping baskets become increasingly expensive, the coffers of many grocery billionaires are becoming increasingly full.
Odd Reitan built his fortune on the Rema 1000. When the tax figures were released recently, it emerged that he had the second largest fortune in the country. A step forward from last year. Reitan’s son and boss, Ole Robert Reitan, also made the list. He has the sixth largest fortune in Norway.
His brother Magnus fell down the list, but that’s because he moved his fortune to Switzerland by transferring shares to his children who live there.
The largest grocery group in Norway is Norgesgruppen, with chains such as Kiwi, Meny, Spar, Joker and a large number of others. Here, the anonymous Johansson family is the dominant owner.
Together the brothers Finn Hartwig, Karl Edward, Peder Oskar and Knut Sigurd own just over half of the company. The figures showed that everyone increased their wealth by NOK 1.1 billion each in the past year.
My father and the Chairman of the Board, Johan Johansson, has the largest contribution. His fortune has fallen by a few hundred million kroner in the past year. He probably manages his affairs well, and is worth 5.1 billion Norwegian kroner.
Knut Hartwig Johansson (86 years old) helped build the Norgesgruppen, and is Johan Johansson’s father. Kabir currently lives in Snarøya.
-Consistently profitable
However, grocery researcher Ivar Petersen believes that running a grocery store in Norway is not very profitable.
He points out that grocery chains have a margin of only a few percent. This means that for every hundred shillings they sell, they are left with only a few kroner.
– If they want to maintain their profit margins, they must raise prices when costs rise, Petersen says.
However, the contradictions are now striking.
– It was a lean and difficult year for consumers. But for the industry and the grocery business, it’s been as good a year as most, he says.
He stresses that there will be differences between individual chains and retailers.
– He says grocery chains operate in good times and in bad times.
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He believes that agricultural policy has made it safe and good to run a shop or food industry in Norway.
– The protection we provide for agriculture in Norway also helps protect the Norwegian food industry and Norwegian grocery chains. He says they are protected from foreign competition that could have helped drive down prices.
This is how the strings respond:
Rima 1000: -We must be the cheapest in grocery stores in Norway. We compete at the lowest price every day, and our business model is to sell high volumes at low margins. Our margins have been set at between three and four percent since we established low prices in Norway in 1979, says category and purchasing manager Line Arnes.
– The absolute largest part of our costs is the cost of goods, so when suppliers increase the price for us, unfortunately the price in the store also increases. In the same way when our purchase prices are lower, we take it directly to the customer in the form of a lower price on the shelf, says Arness.
Norwegian group: – In the past two years, we have seen historically large increases in our purchase prices, and our profitability has declined. This is because costs have increased more than prices. “We completely understand how difficult it is for many with prices rising,” says communications director Ken Sweland.
Our first priority is to control cost growth. In the first half of this year, we had a profit margin of 2.4 percent, which is low, regardless of whether you compare it to other grocery chains, other merchants, or companies in other industries, Sweland says.
Barn: – We cannot answer for other grocery operators, but cooperative chains have not raised prices too much. Our goal is to provide the 2.3 million members of the Coop with high-quality products at the lowest possible price, and every year the profits are shared with the members, says Communications Director Harald Christiansen.
-We fully understand that it has been a difficult year for many Norwegians and we recognize our responsibility to keep price developments as low as possible. Our profit margin has been strongly challenged by the rising prices of the goods we purchase, as well as the fact that almost all of our operating costs have also increased. However, we do everything we can to keep prices as low as possible for customers, says Christiansen.
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