Norwegians pay more than neighbors

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A recent report from the government food chain assessment committee (Matkjedeutvalget) shows that  Norwegians pay 23 percent more for their food and staple goods than Swedes. The steep price of local agricultural commodities, coupled with high purchase cost on international goods allows merchants to jack up the prices on the remaining goods in order to turn a profit in Norwegian convenience stores – and they get away with it because Norwegians aren’t price conscious.

For more than one reason, Norwegian consumers pay much more for staple goods than their Swedish and Danish counterparts. PHOTO: Kjetil Ree

“Norwegian agricultural policy helps keep the cost of Norwegian produce high,” Christian Rygh, of the Norwegian Agricultural Authoriy, told newspaper Aftenposten. “This also gives stores the opportunity to raise prices on goods there is no duty on. Coffee and tea are more expensive in Norway than in Sweden,” he adds.

The food chain assessment report also examines the comparative retail price of international goods in Sweden and Norway. The discrepancy is great, and though some of this can be blamed on currency levels, high transport costs and taxes, some believe it is because international suppliers know Norwegians are good for it. “Suppliers of international brands look at purchasing power in the country when setting their prices. It is quite logical that global actors would have different views on the individual European countries,” Per Roskifte, communications director of major store chain Norgesgruppen, told Aftenposten.

Other merchants also confirm that the price of one commodity can vary depending on whether it has been sold to a Norwegian, Danish or Swedish store. Prices of certain goods, particularly hygiene products such as shampoo, toothpaste and soap, can be up to 50 percent higher in Norway. “Norwegians concern themselves with prices, but not so much when they are shopping in Norway. Furthermore, shampoo is a fairly small product that does not cost much and they might not even notice,” Randi Lavik, researcher with the National Institute for Consumer Research, told Aftenposten.

International suppliers disagree with the notion that they set prices higher for Norwegians. “Absolutely not,” said administrative director Alexander Throne-Holst of Unilever Norway. In his opinion, prices are higher in Norway because small grocery stores pop up on every corner and this adds to distribution and salary costs. These shops are more expensive to run and are less profitable than major chain locations. “In other countries, convenience store chains would require their customers to travel a bit further to shop.”

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  • Bjørn14

    “Alexander Throne-Holst of Unilever Norway. In his opinion, prices are higher in Norway because small grocery stores pop up on every corner and this adds to distribution and salary costs.”

    Apparently, Mr. Throne-Holst hasn’t been to most mom-and-pop stores where I find the prices extremely competitive if not cheaper. I can usually find products in those stores that I cannot find in the chain stores. I was in a little tiny store in rural Sweden and I was amazed at the choices I had compared to the ICA Maxi near my house.

    • KP12

      Prices here disgust me, and is nothing but a big feed into the already fat norwegian goverment. Low income families cant even afford healthy food, they are forced into buying crap. There is no reason for the prices in this stupid country, besides quadruple taxation on just about everything.

      • I agree with Mr Johnson and pretty much all that was said in the previous post. However, Norway right now is the best country in the world to be a citizen of, if you are, an infant, unskilled, slow, handicapped, old or pregnant. So at least it good for the majority of us (Human being). It is an egalitarian society, a very different model from the US, or the UK. Norwegian can afford this alternative model because they have decided to collectively own and share a vast quantity of oil and gas among a small population. Before the discovery of these resources in the 70s Norwegian were poor, most of them subsistence farmer and immigrating to the USA.

        • That’s a myth if ever there was one, Norway was not a poor country before oil, I don’t know why people keep on saying it was, it was a well off European country; Norwegian immigration to North America stopped before WW1; all the oil wealth has done bugger all for Norway , just loooking at the state of the railroads, highways, health, education and elderly care in Norway it’s well below par especially for a country with the wealth Norway has.

    • Darek

      Norway is a very small market (approx 4,5 mln people, over 0,6 mln @ Oslo), so you don’t have many brands available worlwide, it’s too costy to introduce new products, launch campaign etc. No competition, higher costs = higher prices. Even more often meetings in any restaurant (launch, wine) aren’t available for avg. employee, too expensive for Nosk.
      Move to another country, more sunny, more relaxed, normal prices

      • That’s complete BS, New Zealand is also a small country with a smaller population than Norway and is the most isolated country in the world, the range of products available in NZ is significantly higher than the range of products available in Norway.

  • Hans M

    Yes, Norway is expensive. This is a known fact, and why so many Norwegians choose to go to Sweden for their bulk shopping.

    However, this is mostly a non-story because it fails at one point: How much – as a percentage – of their income does Norwegians spend on groceries compared to Sweden, Denmark and the rest of Europe? I strongly suspect that it is the same or less, seeing as how (according to http://en.wikipedia.org/wiki/Median_income ) Norwegians on average earns roughly 35% more than our neighbors. In which case Norway really isn’t expensive for Norwegians, only for visitors.

    • Neil

      I earn far more money here than I did in the UK but after tax I end up with almost the same amount each month as I did there.

      Then I have to buy food that costs significantly more money.

    • Neal

      Rubbish, after my mortage food is my families biggest expense, I don’t think the average Norwegian ever really thinks about how much life costs here, they just pay and feel happy because they earn more, the problem is earning more isn’t enough when everything is overpriced. I make a lot more here than I did in my home country but at the end of each month I have a lot less left over.

    • Richard Enn Johnson

      Before I came to Norway, I wouldn’t even look at the prices in the grocery store, I would just get what I wanted. My attitude was “food is important, don’t skimp on that”.

      As you can guess, things have changed now, and I am in ultra-skimping mode whenever I go to the store. So, I could actually be overcompensating and spending less on food in Norway than I do in cheaper countries, just because I’m being so careful and getting lower quality stuff. I think the study that said “Norwegians spend less of their income on food” doesn’t necessarily say a lot about anything. They seem to love the inedible garbage they call “pølse” and “grandiossa”, which is not so pricey.

      Now, here’s what really ticks me off about Norway: the “our salaries are so high that we’re happy to pay extra for food” nonsense. Your salaries are NOT high! A recent study showed that the purchasing power of Oslo residents was ranked 26th out of cities in Europe, and that’s not very good.

      I am an engineer, I would be making the exact same salary in the USA or Australia or the UK, and I would be paying a lot less tax. Pretty much the only way you’re making more in Norway than you would elsewhere is if you are unskilled labor. Minimum wage in Norway is roughly 3 times what it is in the USA, whereas high-skill jobs pay roughly the same, or less in Norway than they do elsewhere. Once you get into upper management you’re making a smaller and smaller fraction of what you would make elsewhere. Norway rewards mediocrity, and discourages high achievement, all in the interest of “equality”. The future is bleak for this country, mark my words, we cannot get highly skilled people to come and stay here. Why would they come here when they could earn more and live much better elsewhere?

      Let me break it down:

      Cleaning staff / cashiers (minimum wage workers)
      Norway salary: $50,000
      USA salary: $18,000
      (Norway wins, fair enough)

      Senior Software Engineer (or other Master’s degree holders with 5-10 years work experience):
      Norway salary: $90,000 – $130,000 + benefits
      USA salary: $90,000 – $140,000 + private health insurance provided by employer + benefits.
      (USA wins by a lot if you consider tax, and cost of goods, services, housing, transport etc.)

      CTO / upper management:
      Salary Norway: $200,000
      Salary USA: $250,000 – $1,000,000+
      (USA wins by a heck of a lot – everything is half price or less in the USA!)

      Australia/UK/USA and some other countries are interchangeable in the above.

      At least the cleaning staff are happy here, well done Norway!

      When I get my US green card I am out of here quicker than you can say “there goes our last engineer”. I’m pretty sure that’s what they want actually, just pay the insane taxes for a while, and then leave before you get anything at all in return. All of the engineers I know who moved to Norway around the same time as me (3 years ago) have already left, citing the reasons stated above for their departure. I don’t know any offshore workers though, they get paid pretty well to compensate for longer hours and risk, but that’s the same everywhere.

      Well anyway, thank you for letting me get all that off my chest, I hope I didn’t offend anybody. The salaries I listed were rough estimates to illustrate my point about the ratio of Norwegian salaries to other developed world salaries being inversely proportional to skill level.

      • NorthernVix

        I would think the fact that the janitorial workers here can put food on the table for their families at all trumps your stated inability to afford top-shelf groceries.

        Having moved here FROM the United States I can say with reasonably certainty that no, it’s not better over there.

        • Richard Enn Johnson

          That’s a false dichotomy and a red herring rolled into one, I wasn’t arguing against janitorial workers being able to put food on the table. They’re better off here than they would be anywhere else, like I said, good for them and I hope they enjoy it here.

      • Neil

        I have a friend that works in finance and he’s basically stuck here for various reasons for 18 months. Once that time is up he’s shipping his family back to the US simply because of the high cost of living.

      • Neal

        Well said mate, but just try convincing the locals that there country isn’t what they think it is. Doctors/dentists are another good example, here in Norway they aren’t that well paid, whereas in the US/UK/Aust/NZ being a Dr/dentist is a license to print money.

  • Euro

    That Univeler spokesman is not talking about the mom and pop stores. He is talking about the practice of the major chains in Norway, which is to blanket the country with tiny stores that have a very limited range of expensive products. It is not true however that these stores have high costs. They are outfitted not too differently to warehouses and typically staffed by 2 or 3 part time teenagers on bargain basement wages. In a perverse turn of words these chains are all marketed as “lavpris” or discount stores, when in fact they are the most expensive in the world.

    Distribution costs are not all that high as claimed, due to the limited range of product and the fact that basically two companies, Norgesgruppen and Rema constitute a nationwide oligopoly at wholesale distribution level in Norway.

    So fundementally both the Norgesgruppen spokeperson and the Unilever one are playing games and quite far from the truth.

    Norway does in fact have a handful of small mom & pop stores. These are usually in urban areas and run by immigrants. They are better than the major chains on both price and product range.

    There’s little point with the outrage by the press however. This system exists because the vast majority of Norwegians are not interested in food. The culture for food does not exist on a mass scale in Norway – it was killed a long time ago. These chains thrive on low prices and quality because the modern Norwegian consumer is ignorant of food and has too much money floating in the pocket. So it is all too easy to sell them junk at high prices, while claiming the opposite.

    • NorthernVix

      I agree that it seems to be the disinterested Norwegian who pays too much for food. Being a foreigner who likes to cook, I have greater problems with finding obscure ingredients than I do paying for them. Keeping to a grocery budget isn’t terribly difficult if you don’t insist on buying the same bland prepackaged crap that everyone else does.

      Support your local immigrant store. There’s crazy and awesome stuff there.