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Supermarket chain Iceland to close two more Norwegian stores

Frazer Norwell
Frazer Norwell - [email protected]
Supermarket chain Iceland to close two more Norwegian stores
Iceland will close two locations of its supermarkets in Norway. File photo: A UK location of the supermarket chain Iceland. (Photo by PAUL ELLIS / AFP)

Iceland will close its stores in Kristiansand and Bekkestua, with a combination of Brexit and finding suitable premises playing a factor in the supermarket’s struggles.

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The chain has announced that two Iceland Mat supermarkets will close down, with the company refocusing its efforts on the remaining store in the St Hanshaugen district of Oslo.

The closure of the stores in Sørlandsparken in Kristiansand in southern Norway and Bekkestua in Bærum follow locations in Asker and Stovner closing at the end of last year.

“We have reviewed how we are going to move forward and have come to invest in one store in addition to the online store and being a wholesaler,” the general manager of the chain, Geir Olav Opheim, told business news publication E24.

After opening its first store in Norway in 2018, Iceland Mat’s original strategy was to expand as a supermarket chain. The supermarket has now dropped this strategy.

Opheim said that three factors were behind the change in strategy. The first is finding a good location to establish a store. The second is Norwegian supermarkets typically establishing clauses which prevent competitors from being able to use premises that would make a good location.

When one supermarket moves out of a location, it generally includes clauses in the contract that prevent competitors from trying to get a foothold in the area.

Such clauses will be banned in Norway from the new year, Minister of Trade and Industry Jan Christian Vestre has announced.

“It will be too late for us,” Opheim said of the change in legislation.

The third factor limiting Iceland is Brexit. Iceland is a British supermarket chain, and most of the goods it sells are imported into Norway. Due to Brexit, it has become difficult for the chain to achieve a reliable flow of goods into its stores. Norway itself also has tolls on certain imports into Norway to protect its agricultural sector and Norwegian producers. 

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“This has led to significant cost increases, which have simply made it too expensive to have a wide range of products. So we primarily take in the best sellers,” he said.

Opheim also said that stocking Norwegian goods was a costly practice as, due to its smaller size, Iceland receives a poor deal from wholesalers.

In addition to its St Hanshaugen store, the chain will try and transition to more of a wholesaler in an attempt to get more Iceland goods into Norwegian supermarkets.

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