Professor Tor Wallin Andreassen believes the grocery chains are dancing on the grave of the closed Europris and Nille when they start a price war on Easter goods.
The shops are once again affected by the municipality’s infection control measures, and this week the shops also had to close in Viken county and Gran municipality in the hinterland.
The Easter goodies of all time
For both Nille and Europris, the time before Easter is an important period with large sales of Easter-related products, such as Easter sweets, Easter decorations, napkins and candles. Both of these chains are now going against the times’ sales slam on these goods, which they will not be able to sell.
Director of Nille, Kjersti Hobøl, did not hide the hopeless situation around that 125 stores have had to close.
– It is a high season in turnover. We burn inside with goods. People will buy these items anyway, and this will give extra pressure in the grocery stores. Then time will show how wise this is, a resigned Hobøl said yesterday to Nettavisen.
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The head of Europris, Espen Eldal, believed that the closure of their stores was out of the question.
– Our product range overlaps the grocery stores, so we think we should be allowed to keep it open, he told Nettavisen.
Despite this, the European price manager must reconcile himself with the fact that 80 stores have had to close.
– You do not profit from an emergency
– The fact that the grocery industry has, however, got rid of important competitors in Easter goods, means that they can enjoy increased profits, but with that also comes an important social responsibility.
Tor Wallin Andreassen, professor at the Norwegian School of Management (NHH), tells Nettavisen, and adds;
– The grocery industry should not take advantage of the situation and advertise more than they had planned for, for the Easter products. Everyone knows that too many sweets are not good for the body, he says and emphasizes an important principle:
– When the competitors, Nille and Europris, have been ordered to close, the grocery industry should not dance on their grave, by increasing the advertising pressure and competing for additional sales, which results from them missing out on Easter sales.
Recently, Nettavisen reported that the players in the grocery industry are cutting back on customers for Easter goods this week. Wallin Andreassen believes that the price war is untimely, and that the grocery stores are served with moderation. Both in terms of advertising and volume of the products.
– Modern management dictates that you do not profit from an emergency situation with competitors, he says.
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Does not change the consumption pattern
Professor of economics and colleague, Øystein Foros, at the Norwegian School of Management, believes that the grocery industry has come out well from the pandemic, together with, among others, the building materials industry and the wine monopoly.
– What we see now is a shift in the market, where the grocery industry is the big winner, says Foros to Nettavisen.
He believes that it is not a question of customers in the future stopping buying seasonal goods cheaper at Nille and Europris, but is only a short-term shift.
– The situation does not change Norwegians’ consumer habits, he concludes and continues:
– In isolation, it is a gift package for the grocery industry, but it is not the intention of the government that specialty stores or others should be affected.
The economics professor believes that we should not take it for granted that the grocery stores raise the prices of, for example, Easter napkins and candles.
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– It is not certain that the products will be more expensive in the grocery store, he says, and emphasizes that the closure will most likely lead to less Easter celebrations than otherwise, due to strict rules for social contact.
Humble
Coop’s head of communications, Harald Kristiansen, emphasizes that they have great compassion for the players affected. He denies that they care about the situation.
– It is with great humility that we keep our stores open, and we really feel with other players in the trading industry who have to close, he says to Nettavisen.
– Some are already struggling financially and are in danger of going bankrupt, and we sympathize with all the employees who are now laid off or are in danger of losing their jobs. This is a situation we should all be without, he believes.
Kristiansen emphasizes that Extra was the first to cut prices for Easter.
– Now Extra is the first to cut prices for Easter, so that customers will get a cheap Easter shopping, and they will have plenty of time to shop, so we avoid large accumulations of customers in our stores – then it will be a little weird get criticism for price cuts, he says.
Do not increase the advertising pressure
Head of Communications, Kristine Aaavaag Arvin, responds to the economics professor’s criticism:
– Many have had less to deal with in the last year, and it is more important than ever that Kiwi pushes prices down, says Aaavaag Arvin to Nettavisen.
She emphasizes that increased sales, partly as a result of closed borders, have given Kiwi the opportunity to drive even harder on price.
– We do this every day, and it contributes to Statistics Norway’s consumer price index showing that the prices of food and non-alcoholic beverages have only increased by 0.1 per cent in the last 12 months. In the same period, the consumer price index is up 3.3 percent, she says.
The head of communications states that many typical Easter goods have received price cuts, as they usually do. But that they have not increased marketing as a result of other stores having to stay closed.
– We run campaigns that are planned in advance, says Aaakvaag Arvin.
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