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High Swedish prices put Norwegians off cross-border shopping trips

Norwegians are spending less money cross-border shopping in neighbouring Sweden, the latest figures from Norway's national data agency show. 

Published: 24 February 2023 12:19 CET
Pictured are Norwegian and Swedish flags.
Norwegians are going on less cross-border shopping trips to Sweden. Pictured are the Norwegian and Swedish flags on Svinesund bridge. Photo by Petter Bernsten / AFP

Locals in east Norway have long enjoyed the tradition of heading to Sweden for cheaper goods and a more varied product selection. Last year, they spent an estimated 10.4 billion kroner on cross-border shopping trips, figures from the national data agency Statistics Norway show. 

However, this is still significantly lower than the previous record set in 2019, Statistics Norway reports. 

“When all the travel restrictions were removed on February 12th last year, cross-border trade picked up again, but Norwegians traded less across the border than was usual before the outbreak of the pandemic. Compared to the record year 2019, the trading amount was 35 percent lower in 2022,” Kristin Aasestad from Statistics Norway said of the figures. 

Additionally, the data shows that Norwegians went on fewer trips across the border for shopping in 2022 compared to the record year of 2019. Overall, the number of trips decreased by just over 40 percent between 2019 and 2022. 

One explanation for the decline in Norwegians heading across to neighbouring Sweden to stock up on groceries is a sharp increase in food prices, meaning that Swedish food prices are no longer significantly lower than in Norway. 

According to Statistics Norway’s figures, food and non-alcoholic beverages in Sweden increased in price by 14.2 percent between 2019 and 2022. Meanwhile, the cost of food in Norway increased by 7.2 percent during the same period. Furthermore, the average spend on a shopping trip abroad has increased from 1,690 kroner in 2019 to 1,835 kroner last year. 

“One explanation for why Norwegians spend more money on each shopping trip may be related to the sharp increase in the price of groceries in Sweden and not necessarily that Norwegians put more in the shopping basket,” Aasestad. 

Just under 97 percent of all shopping trips abroad by Norwegians were to Sweden last year, with Strømstad and Charlottenberg being the two most popular destinations with Norwegians.

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Why are food prices in Sweden going up so much more than elsewhere?

Pressure is growing on ICA, Coop and Axfood, Sweden's traditional supermarket triopoly, after Sweden's finance minister Elizabeth Svantesson said it was "hard to understand" why food prices were rising so much faster in Sweden than in neighbouring countries. But is it their fault?

Published: 16 March 2023 16:15 CET
Why are food prices in Sweden going up so much more than elsewhere?

How much have food prices gone up in Sweden? 

Prices of food and non-alcoholic beverages in Sweden have risen by 21 percent between last February and this February, the biggest increase since the start of the 1950s, eclipsing even the high-inflation years of the 1970s. 

“During the 1970s and 1980s, grocery prices also rose a lot, but not by as much as they are doing now,” John Eliasson, a price statistician at SCB, said in a press release announcing the new figures. 

Prices of eggs, dairy products, and fats have risen the most, with each category rising in price by more than 30 percent in a single year. 

Two of the products which have seen the most extreme rises are leeks and cauliflowers, which have both risen by more than 80 percent in price, with most of the rise happening just over the last month. 

Cauliflowers rose 48 percent in price between January and February, tomatoes by 38 percent and peppers by 34 percent. 

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‘Hang every greedy ICA-owner’

A discussion on Sweden’s internet forum Flashback laid the blame for high prices firmly on the supermarket. 

“Time to hang every greedy ICA-owner,” read one post, according to the TT newswire. “All the greedy bastards behind this deserve to be shot,” went another. 

ICA, which has a franchise structure, sent a warning out to all of the owners of its different stores, warning them of a “risk of attacks against shops, individuals, or private property connected to the message being spread”. 

But even Finance Minister Elisabeth Svantesson on Wednesday night sought to shift the blame for high prices onto the supermarket industry and their suppliers, saying the extent of the price rises was difficult to explain. 

“When Swedes’ shopping baskets have risen in price by over 20 percent in one year, and that hasn’t happened in other places around us, I think you have to ask questions,” she said in an interview on Swedish broadcaster SVT’s flagship news programme. 

Svantesson said she had called the leaders of Ica, Coop, and Axfood, Sweden’s three big supermarket chains, to a meeting next week. “This is hard to understand and I want them to explain it.” 

Sweden’s supermarket sector is less competitive than in many other European countries, such as the UK, France, and Germany. 

Germany’s Lidl is the only foreign competitor to have broken into the market, and some argue that the lack of competition makes it easier for Sweden’s supermarkets to pass rising costs on to consumers. 

“There are record profits in the retail sector,” Daniel Suhonen, leader of the left-wing Katalys think tank, told SVT on Thursday. “If workers are seeing their costs increase enormously and not getting any increases in salaries, maybe the bosses of Ica and Coop supermarkets should consider doing the same.”

But is it really the supermarkets’ fault? 

Svantesson’s predecessor as finance minister, Mikael Damberg, last year commissioned the National Institute for Economic Research to carry out a special study into whether supermarkets in Sweden were protecting their profit margins at the extent of the consumer.

The study, published in December, concluded that rising prices in supermarkets reflected the weakness of the krona, and did not reflect excess profits. 

“For all companies to behave in an underhand way at the same time is pretty unlikely,” Albin Kainelainen, the institute’s Director General said in a press statement. “This doesn’t mean that individual retailers might not have done so regarding individual products, but we don’t see this at an aggregated level.” 

“If you look at import prices for commodities like food products, they have increased a lot, by about 20 percent over the last year, so it’s risen much faster than the CPI [consumer price inflation] numbers,” Jörgen Kennemar, a senior analyst at Swedbank, told The Local. 

The lack of competition in Swedish supermarkets “was not a new issue”, he said. “And if you look back to one or two years ago, the price increases in Sweden have been quite low.”

“It is only in the last year that Swedish food prices have increased a lot compared to other countries like Norway, Finland and Denmark, but I think that the price increases are related to the weak krona. The currency impact is much greater in Sweden than in Norway, Denmark and Finland.” 

Karin Brynell, chief executive of the Swedish Food Retailers’ Federation, told SVT that there was no evidence of “underhand rises in grocery prices”.  

“We actually think that this is a skewed debate, that this sort of thing is being insinuated,” she said. “The wholesale price of products has gone up more than the prices paid by consumers.” 

What do the parties want to do? 

The Social Democrats have called for a debate in Sweden’s parliament on rising food prices.

“The government doesn’t seem to have any insight into the crisis and is not taking any action, which is why we need to discuss this in parliament,” Mikael Damberg, the party’s financial spokesman said. 

Speaking before Svantesson called the three big supermarket chains to a meeting, he said he could not understand why she had not already done this.

“It’s inexplicable that the finance minister still hasn’t taken the initiative to do this, which many of our neighbouring countries have done,” he said. 

The Left Party has gone the furthest, saying that if the government cannot get ICA, Coop and Axfood to take voluntary action to lower prices, it should legislate either to increase competition in the market or to impose some form of price controls. 

The Green Party wants to temporarily suspend VAT on staples like bread, milk, fruit and vegetables. 

The three government parties, the Moderates, Liberals, and Christian Democrats, and their support party, the Sweden Democrats, all say that the priority is to get inflation under control. 

They have all pushed back against calls for price controls. 

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