Göteborgs Posten went shopping for 45 products in the biggest supermarkets in Gothenburg and discovered that the average total price has fallen 1.5% compared to last year. Tuesday’s Svenska Dagbladet focused on the east-west divide and was delighted to find that the gap in prices between Stockholm and the ‘bargain metropolis’ Gothenburg had also shrunk.
Fredrik Bergström, head of the Research Institute of Trade, told GP that there are two reasons for the falling prices.
“It’s partly because of the new players like Lidl who have entered the food retail market,” he said. “The traditional shops have had to lower their prices on strategic items.”
The second explanation, according to Bergström, is the increasing range of ‘own-brand’ products, which now account for 10-15% of sales in the big stores.
“When, for example, Willys launches its own ranges, it puts pressure on the producers of the traditional brands to lower their prices so they don’t lose market share. This means there’s increased competition between products,” he said.
GP’s survey found that Willys was the cheapest store by some distance, and it’s not just Gothenburgers who are enjoying the benefits. SvD reported that products at the chain’s 14 Stockholm outlets were almost as cheap as in Gothenburg, with a difference of only 7 crowns when a basket of 30 goods was totted up. The difference was even smaller at Coop Forum – just five öre more expensive in the capital.
That puts the pressure on rivals ICA, where Stockholmers are forced to pay 10% more than shoppers in Gothenburg for exactly the same items. Ola Andersson, ICA’s head of profiling – whatever that is – attempted to explain the discrepancy.
“Within ICA we have independent shopkeepers who are free to set their own prices in the stores,” he told SvD. “If you compare with Willys and Coop, they set their prices centrally, which we can’t do and don’t want to do.”
But he admitted that the chain had to do something in the face of this cut-price competition.
“We want to establish stores which offer added value in the form of reduced prices,” he said.
In the meantime, shoppers might consider going abroad for their monthly groceries. A report published on Wednesday by the Swedish Competition Authority concluded that the country’s food prices – east and west – are simply too high.
Comparing prices in all 25 EU member countries, the authors found that only five countries are more expensive. The average Swedish family pays 6,700 crowns a year more for food than the average German family, and 20% more than British shoppers.
Discerning consumers are looking at more than the price, though, according to Friday’s SvD. The green keyhole symbol, indicating lean or fibre-rich foods, has become an important factor in shoppers’ decisions, and last year sales of products carrying the mark increased by 15%.
But the National Food Administration – which set the original standards in 1989 – is now planning to introduce tougher criteria. Among other measures, there will now be stricter limits on salt and sugar content. The move has been welcomed by the food industry.
“It’s incredibly important that the mark guides consumers properly,” said a spokesman at Coop, which is already working to ensure that as many of its products as possible will meet the new criteria.
No such concerns for Sweden’s strawberry producers, though, and this week saw the first offering of the season picked up by the country’s wholesalers. Tuesday’s Dagens Nyheter reported that it will be a good year but grower Mats Olsson, who expects to supply around 50,000 litres of strawberries before the summer’s over, was cautious.
“There’s no art to growing strawberries,” he said. “But to sell them at a good price is hard.”
His main concern is the threat from perfidious punnet-packing Poles.
“I know that a lot of boxes marked ‘Swedish Strawberries’ have gone down to Poland – and they’re not coming back empty,” he said. “I don’t have anything against Polish strawberries but it has to be an honest game.”