Could Norway's weak krone mean new food price hikes?
Imported goods have become much more expensive due to the weak krone and high price growth in foreign countries. But Norwegian stores haven't increased prices on such items – yet.
According to experts, several imported foods including chocolate, some seafood, half-baked products, and frozen pizzas, are now artificially cheap in Norwegian shops.
These foods have become much more expensive overall due to the weak krone and high price growth in the countries where they come from, but due to the "price wars" between Norwegian grocery chains – which started ahead of the Easter holidays – their current price in stores does not reflect this increase.
READ MORE: How long will the Norwegian krone remain weak?
As special price offers are set to expire by the end of April, these prices will likely go up soon.
Strong price hike around the corner?
While supplier costs have gone up, some of the largest stores in the country still haven't increased the prices to reflect this development, food industry analyst Ivar Pettersen told newspaper VG.
This particularly applies to food imported from abroad.
"It is surprising that there is such a large deviation for sugary products and seafood in particular. It seems that this is an artificially low price. It may be that they will adjust (prices) strongly for these (products). It will be very exciting to see (what happens)," Pettersen said.
When it comes to sugary foods, the bill that suppliers send to Norwegian grocery chains has increased by 15.8 percent in a year (from March 2022 to March 2023), but prices in shops have only increased by 2 percent.
That means a difference of 13 percent is not showing up on the shop shelves.
This discrepancy is even more notable for some fish and seafood (such as tuna and scampi but also Norwegian-produced seafood): the import price has increased by 32 percent, while the retail price has increased by 11 percent. This might leave some people scratching their heads, as Norway has a world-renowned domestic seafood industry.
Pettersen said that the seafood intended for Norwegian customers could have been sold in Europe for higher prices, and that suppliers are therefore unwilling to sell at lower prices in Norway.
May 1st – an important date for price developments
According to Pettersen, the price hikes for many items could occur after May 1st, when supermarket Kiwi's price guarantee on 245 items expires.
"If the industry focuses on May 1st, it is likely that there will be an increase in price for at least some of these imported goods. In that case, it might be a good idea to do some extra shopping for non-perishable goods before then. Maybe fill the freezer a little extra and stock up on non-perishable dry goods," Pettersen said.
Norwegian School of Economics (Norges Handelshøyskole, NHH) professor Øystein Foros told VG he believes the increase will be more gradual.
"On the one hand, there's a temptation (for stores) to come up with a new (promotional) campaign because this one has been a success among Kiwi customers, but I think perhaps all three [supermarkets Kiwi, Rema, and Extra, ed.] have experienced that this is very expensive.
"But then, they are so afraid of the attention that nothing dramatic will happen on Tuesday morning. It would surprise me greatly if there were a sudden increase," Foros told the newspaper.
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According to experts, several imported foods including chocolate, some seafood, half-baked products, and frozen pizzas, are now artificially cheap in Norwegian shops.
These foods have become much more expensive overall due to the weak krone and high price growth in the countries where they come from, but due to the "price wars" between Norwegian grocery chains – which started ahead of the Easter holidays – their current price in stores does not reflect this increase.
READ MORE: How long will the Norwegian krone remain weak?
As special price offers are set to expire by the end of April, these prices will likely go up soon.
Strong price hike around the corner?
While supplier costs have gone up, some of the largest stores in the country still haven't increased the prices to reflect this development, food industry analyst Ivar Pettersen told newspaper VG.
This particularly applies to food imported from abroad.
"It is surprising that there is such a large deviation for sugary products and seafood in particular. It seems that this is an artificially low price. It may be that they will adjust (prices) strongly for these (products). It will be very exciting to see (what happens)," Pettersen said.
When it comes to sugary foods, the bill that suppliers send to Norwegian grocery chains has increased by 15.8 percent in a year (from March 2022 to March 2023), but prices in shops have only increased by 2 percent.
That means a difference of 13 percent is not showing up on the shop shelves.
This discrepancy is even more notable for some fish and seafood (such as tuna and scampi but also Norwegian-produced seafood): the import price has increased by 32 percent, while the retail price has increased by 11 percent. This might leave some people scratching their heads, as Norway has a world-renowned domestic seafood industry.
Pettersen said that the seafood intended for Norwegian customers could have been sold in Europe for higher prices, and that suppliers are therefore unwilling to sell at lower prices in Norway.
May 1st – an important date for price developments
According to Pettersen, the price hikes for many items could occur after May 1st, when supermarket Kiwi's price guarantee on 245 items expires.
"If the industry focuses on May 1st, it is likely that there will be an increase in price for at least some of these imported goods. In that case, it might be a good idea to do some extra shopping for non-perishable goods before then. Maybe fill the freezer a little extra and stock up on non-perishable dry goods," Pettersen said.
Norwegian School of Economics (Norges Handelshøyskole, NHH) professor Øystein Foros told VG he believes the increase will be more gradual.
"On the one hand, there's a temptation (for stores) to come up with a new (promotional) campaign because this one has been a success among Kiwi customers, but I think perhaps all three [supermarkets Kiwi, Rema, and Extra, ed.] have experienced that this is very expensive.
"But then, they are so afraid of the attention that nothing dramatic will happen on Tuesday morning. It would surprise me greatly if there were a sudden increase," Foros told the newspaper.
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