October 2, 2022

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Grocery exchange, grocery |  Food price test: Extra is completely crushed by Kiwi and Rema 1000

Grocery exchange, grocery | Food price test: Extra is completely crushed by Kiwi and Rema 1000

Have you thought that food has become unusually expensive during the Corona pandemic? So you may not be alone. But is it really true?

The online newspaper compared a shopping cart to 28 items in discount chains Kiwi, Extra and Rema 1000. In a price test, we checked whether the prices of the same items changed from September 2021, last year, to the end of January of this year.

Read the full test in the box

The result shows an almost historical difference in price, with Extra taking twice the price of competitors on individual goods.

This is bad news for the chain that advertises “at very low prices”, has the slogan “Make it cheap”, which has won price tests several times.

The price test shows that the Extra is 121 kroner more expensive than Kiwi and Rema 1000 – a 14 percent increase in prices. This corresponds to the increased prices paid by Norwegian grocery customers in convenience stores Joker and bottom price.

The online newspaper has never measured such a large price difference in the lower price chains in the general shopping cart since it began price tests in 2019.

– This is an unusual observation, as Austin Voros, professor of economics at the Norwegian School of Management (NHH), confirms to Netavisen.

Historical Spreads

When we compared the same cart in September of last year, just over five kroner separated the most expensive and low-priced chain from the total.

The price picture now shows that the extra charge is NOK 15 more than kiwi and rima 1000 for the same item.

The e-newspaper price test shows:

  • 21 of the 28 items have become more expensive in Extra since September 2021.
  • 1 in 3 items have received a price increase, which is more expensive than Kiwi and Rema 1000.

  • Rema 1000 and Kiwi set prices for only 4 out of 28 items. A number of other items have become cheaper.
  • Broccoli has been reduced by 10 NOK in all stores.
  • An extra charge of 15 kroner for Krydder Kalkunskinke.

  • Superchips cost 13 kr more per Extra than Kiwi and Rema 1000.

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The competition is not fierce enough in the grocery industry

However, the large price gap between eXtra and competitors is not only unusual.

The Kiwi and Rema 1000’s arch-rivals come out perfectly in the price test, actually on the ear.

The grocery industry is clearly watching each other, moving in line with price, says Ivar Gasland, social economist and professor at BI.

The economist asserts that equal prices indicate little competition between chain stores. Gaasland believes that prices at the grocery store would have gone up and down much more had the competition been tougher.

Foros thinks one shouldn’t put too much into the fact that the Rema 1000 and Kiwi come out perfectly in the test, but stresses that in price surveys it’s common with different prices for a few items. A number of tests by Nettavisen have shown this as well.

Here you can check out what has become more expensive at the grocery store.

Economist: An unusual note

The grocery industry adjusts prices twice a year, on February 1 and July 1. Foros points out that we are now facing price changes in the industry.

– It’s amazing that this happened one week before the adjustments in February. Extra may have started its modifications. In any case, it’s unusual for the price to not match competitors, on a lot of the items in the cart, he points out.

The economics professor says there may be larger price differences in lower price chains in the weeks after the February and July adjustments – before the chains usually approach price again.

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Gaasland and Foros point out that there is now an expectation in the market that prices will rise due to higher raw material prices and higher fertilizer prices.

They expect that Kiwi and Rema 1000 will also raise prices as a result of the turbulent market. In addition to the price adjustment that takes place in February.

Read also: A clear message from the Norwegian grocery giants: Food prices are now on the rise

Extra: We are not happy with the result

This is how Harald Kristiansen answers why the Extra costs 14 percent more than the Rema 1000 and Kiwi.

– We are not happy with the result, Extra should be as cheap as competitors, but this is an unrepresentative shot. We are now in a period where it is completely normal for prices to move a lot. While prices in the rest of Europe rose by 2.5 percent, prices in Norway fell by 2.2 percent as a result of stiff competition, he says.

– Are you thinking of lowering prices?

– We cannot comment on our pricing strategy for competition reasons. Extra discount series will continue to have the lowest prices and the best promotions, so that customers, who are also our owners, get the cheapest shopping cart in Extra.

Christiansen says he also cannot comment on whether there will be another price increase in February.

Not happy with the same price

They don’t like to come out like Kiwi’s competitor, Hanne Knudsen, Head of Communications at Rema 1000, says in Nettavisen’s price test.

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– That the prices are the same, and we are not happy – we will sell groceries cheaper in Norway, she tells Netavisen.

You are 14 percent cheaper than Extra, and most of the items in the cart are either cheaper or at the same price as they were four months ago. Do you want to continue to maintain these prices, or will customers expect a price increase approaching Extra?

– We will sell groceries cheaper in Norway, Knudsen promises.

Kristin Akvaj Arvin, Director of Communications at Kiwi, answers that there is fierce competition in the industry, and they strive every day to be the cheapest.

When we push prices, competitors often follow. Kiwi price pressures contributed to a 1.9 percent drop in food and non-alcoholic beverage prices from December 2020 to December 2021, while the overall consumer price index rose 5.3 percent, she said.

Kiwi’s Communications Manager says they are happy to be with them

Higher electricity prices and higher interest rates can help make food cheaper.

Some suppliers have announced price increases in the future, but we will do what we can to keep prices as low as possible, she says.

Read other price tests by Nettavisen for the grocery industry here