Strong jump in food prices from February 1, up to 10 percent - NRK Norway

These days, annual negotiations between suppliers to the grocery business and chains are going on. The result of this tug-of-war will appear in the next price window – February 1, 2023.

Sources in the retail chains tell NRK that the price increases will be as much as 10 percent, but specified that the outcome is not yet clear.

The chains will pass on the price increase to customers throughout the winter and spring.

This comes on top of the annual increase in food prices. From November 2021 to November 2022, prices increased by 12.7 percent, according to the Norwegian Consumer Price Index.

– Sad thing. I think a lot of people have problems. It’s one thing for us, says Anne Sælebakke, whom NRK meets at Coop Extra in Majorstua, but there are many who are struggling financially for whom I think this will have dire consequences.

Price increases will be strong

Unfortunately, consumers will face sharp price increases from February 1, Nortura confirms to NRK. The company is the market leader in meat and eggs.

“The increase in electricity expenses this fall alone was twice as high as last year’s earnings,” says Communications Director Kel Rakenis.

The company does not receive any electrical subsidies from the authorities. He explained that costs should therefore be distributed among farmers, industry, commerce and consumers.

– This means that everyone has to do their part, and unfortunately this also means that customer prices have to go up, says Rakkenes.

– Inexplicable

Ivar Petersen, researcher in food economics at Alo-Analyze, doesn’t entirely agree that the Norwegian grocery industry needs to raise prices as much as they do.

In a recent report, Pettersen concluded that the price increase for consumers on food products in the third quarter of 2022 is higher than can be explained by the normal driving forces for the development of prices for food products.

He believes it is unreasonable for consumers to be penalized when food producers misjudge electricity costs.

– Petersen says the price increase is inexplicable.

Accrual costs increases

And already at the end of October, Orkla CEO Nils Celti had walked out and “regretted” that there would be further price increases in 2023.

– We have a backlog on our purchasing costs. In October, Celti said that inflation is hitting a broad base throughout the value chain, and cost increases will continue next year.

The grocery chains are careful not to comment publicly on price negotiations, but sources at all three chains make it clear that there will be “new” price increases starting February 1.

REMA Ole CEO Robert Reitan told NRK at the end of October that increases in food prices will continue as they do in many other industries due to inflation.