The front line is the merchandise shelves where the falling price is the strongest weapon. The starting shot for the stores’ attack on customers has been fired and the war is on, according to Ulf Mazur, CEO of Matpriskollen. – This is definitely the start of a price war, he says. The suspicions were first raised with the government. A concern spread that companies were exploiting inflation to not only pass on increased costs to consumers – but also to raise the price further to increase profits. The Economic Institute, KI, was commissioned to investigate the issue and through advanced calculations it became clear that the risk exists. Not least in industries where competition is weak. The clearest example: The food – where a few players dominate Swedish stomachs. – The grocery trade industry is particularly exposed to excessive price increases as it is dominated to such a large extent by one player. Uncompetitive industries are, for obvious reasons, more sensitive to “overpricing”, says Erik Glans, inflation analyst, KI. Lidl first out to sharpen prices Finance Minister Elisabeth Svantesson (M) had seen enough. She called in representatives of the food giants to demand both answers and action. – When we see that inflation continues to increase and that food prices are the contributing cause, then I want to have a discussion about how these prices can go down again, she says. Shortly after the meeting, the food chain Lidl announced that they are both lowering and freezing the price of over 100 products. Starting Monday, March 27, a large number of items from approximately fifty suppliers received new lower prices, including coffee, milk and meat items. – The response we have received is completely overwhelming and shows how great a need there is for this type of initiative, says Jakob Josefsson, Sweden manager at Lidl. “The start of a price war” This weekend, Ica and Coop also announced that there was an opportunity for them to lower prices. Starting on March 30, Coop members will receive price reductions on fruit and vegetables of around 12 percent. At Ica, it has been announced that the price of 300 items will be reduced by 2-25 percent, then it is up to the Ica retailers to set the price. Although Axfood, which owns Hemköp and Willys, has not yet announced any concrete price changes, Matpriskollen’s CEO Ulf Mazur believes that the price war is on. – Lidl already has a low price and when they go out and lower it further, it is of course noticeable, he says and continues: – It is above all about basic goods and it is good for those who have less in their wallets that they can actually find items that is clearly cheaper. See an interview with the founder of Matpriskollen in the clip above.
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The food giants’ battle for customers: “Absolutely the start of a price war”
