Eggs are squashed on Thomas Andersen’s kitchen table in Tonsberg. But the omelette he usually cooks with El Dorado farm eggs doesn’t taste very good after a recent Kiwi shopping trip.
– I think it was something different then. The packaging was smaller. I bought it now anyway, because it was the packaging I was supposed to get, he says.
When he got home, he received the receipt from the previous week. The price of eggs increased, and the carton shrank from 18 to 12 eggs.
– Then I got deceived, then I got a little annoyed and a little angry actually. I don’t use social media very often, but then I posted on Facebook and asked what kind of inflation is shrinking here, he says.
This is how the package of El Dorado eggs in kiwi shrunk.
Photo: William Jobling/NRK
Price scam by 74 percent
Kiwi has more control over the price of Eldorado eggs than other products, because the brand is theirs.
So how much does the price of eggs increase in kiwis?
NRK’s price mapping shows that one of Norway’s largest grocery chains has made a violent price jump in the span of a few months:
- In June, the price of 18 El Dorado farm eggs was NOK 32.90.
- On July 1, the price rose to 37.40 NOK.
- In September, the price rose again to 37.90. But now the packaging has also shrunk to 12 eggs.
Thus, the price of an egg increased from 1 kroner and 82 kroner to 3 kroner and 16 kroner. This amounts to a 74 percent price hike.
Professor of economics Tor Wallen Andresen at the Norwegian School of Economics says:
– They use a phenomenon called the “hardly noticeable difference” phenomenon from psychology. It is precisely because he does not notice the customer. In other words, the chocolate was made a little smaller, the packaging was a little thinner or the number of napkins on the twelfth roll a little less, he says.
There are many examples of the phenomenon of “barely perceptible difference” abroad, too. In the United States, Kleenex reduced its pack size from 65 to 60 wipes this summer.
Photo: Justin Sullivan/AFP
The goal is to make more money on the goods sold, without informing customers that the goods are actually becoming more expensive.
For companies that sell tons of one and the other, that’s a lot of money for them to save because they can offer less for the same price, says Andreassen.
The kiwi also changed the cartoon
But the kiwi has another, and perhaps more complex, explanation for what causes deflation:
Eldorado’s Kiwi brand costs 18 eggs less per egg than another brand, First Price packs of 12 eggs. The kiwi will make the first price cheaper than El Dorado.
We have a tradition of selling first price in our largest egg packs, and we’ve worked to get you first price in 18 egg packs. When we got it, we chose to change the El Dorado farm eggs package to a 12-pack, says communications director Kristin Akvaj Arvin.
Communications Director Kristin Akvaj Arvin at Kiwi.
Photo: kiwi
So Kiwi switched from selling 12 small eggs under the First Price brand and 18 medium to large eggs under the El Dorado brand, to changing the cartons and contents.
They have gone from selling two packs of eggs cheaply, to raising the price of one significantly, while increasing the price of eggs from First Price even less.
If we ignore the fact that First Price eggs are smaller, the cheapest kiwi eggs now cost NOK 2.08 per piece compared to NOK 1.82 in June.
– The price of Eldorado farm eggs was artificially low. It was sold at a huge loss, and is no longer sustainable over time.
– You tend to say that kiwis never give up price, but here I gave up eggs, right?
– We still have the cheapest eggs, the size of El Dorado and the cheapest eggs from First Price, she says, referring to competitors’ prices, which are about the same.
– But not with regard to the cost of eggs?
It was an artificially low price over a long period, and it was not possible to sell at a loss over time.
Andersen was unimpressed by Kiwi’s explanation, which he also received on Facebook.
– Both Eldorado eggs and First Price eggs are Norgesgruppen’s specialty products. I think these are just excuses, Andersen says.
– mislead customers
Food prices are increasing at the fastest pace in nearly 40 years, according to Statistics Norway. According to Kiwi, more customers are becoming interested in prices, and they are choosing the cheapest brands.
However, Andersen in Tonsberg is one of the few who have complained about whites, according to Kiwi. And this is also the intention on the part of the company, according to NHH professor Andreassen.
He believes that customers are left unable to understand what happens when prices often fluctuate in different ways: the customer must be confused about the cost of the product, so that prices can be set higher on average without sparking a storm from customers.
– When all of the packaging changes, the contents change, and the prices change, it’s messy and hard to keep track of. So I would say that customers are deliberately misled into choosing something that is good for the company, but not so good for customers, Andreessen says.
Economics professor Tor Wallin Andresen follows the grocery market as a researcher, and soon learns of the kiwi egg experience from economic theory.
Photo: CHRISTIAN LURA / NRK
Arvin disagrees that Kiwi is using tricks from economics textbooks to make more money.
– All products are labeled on the shelf with the price per kilogram and unit price and this is clearly stated on the packaging, she says.
Have you tried to confuse customers about the cost of the goods in order to set a higher average price?
– No, by any means. We live on customer satisfaction and want complete transparency about our pricing. She says we are proud of our prices.
Norway is overflowing with eggs
In recent years, Kiwi suppliers have raised the price of eggs much lower than other commodities. Norway suffers from severe overproduction.
This year, 500-600,000 kilograms of eggs could go to animal feed because production is higher than what Norwegians are getting, Nortura Totalmarked NRK reported.
– When I hear that in addition, I think it’s a crisis. Andersen, who eats a lot of eggs, says we should do something to get rid of the eggs and get people to eat them.
Many farmers have hens, and Norwegians are unable to eat many of the eggs laid by the hens.
Photo: Fredrik Varfjell / NTB
Arvin explains why Kiwi does not leave price alone to provide transportation assistance to farmers:
– You are now starting from an item that has risen, the price of which was artificially low. If you look at Kiwi’s entire egg product category, prices are down 5.7 percent so far this year, compared to the same period last year, she says.
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