Kiwi is now implementing its fourth major price cut so far this year. – Of course we follow, Extra answers.
On Monday, Kiwi’s biggest price cut ever begins.
– We cut the prices of over 500 items by an average of 21 percent, says Kiwi Aakvaag Arvin, communications manager at Kiwi, to Nettavisen.
The price cut lasts from 19 October to 1 December.
When the corona pandemic broke out in Norway in March, many were laid off, some lost their jobs, and the economy deteriorated for many. Kiwi claims that this is one of the reasons why they cut the prices of over 200 itemsr earlier this year.
The price cut was over on June 15, but the same day it was over, they started another great price campaign until 1 August. The third price cut they started on 24 August, and on 3 October it was over.
The prices of the goods from the first price cut have already been set.
– Prices were adjusted on October 3, as announced. They were adjusted back to the exact same price as before the price cut. The only exception is Synnøve yellow cheese. It cost 89 kroner before the price cut, and we chose to keep the price at 69 kroner, says Arvin.
Further down in the case, you will find a list of which items Kiwi is cutting prices on.
– To benefit customers
Now Kiwi customers can once again expect cheaper goods.
– We are the price squeezer in the market, and when we are in an extraordinary situation and have had great growth, it is right that the growth benefits customers, says Arvin.
She says they want to show that they appreciate that people choose to shop in the convenience store, and they have chosen to cut the prices of goods most people buy.
– There are price cuts on large items such as salmon, chicken, flour, milk, Coke and washing powder, to name a few, she says.
– We have tried to choose relevant items for the period we are in, and a wide selection, she says.
Wheat flour is one of the products with the largest price cuts. Here the price is actually halved. If you buy 4x2KG Mølleren’s wheat flour, you get a full 49 percent discount. Pre-price was 75.60 and new price is 38.90.
– It is an item everyone buys. We are entering the baking season and flour is an important commodity for many customers, says Arvin.
Earlier in October, Coop launched a major price cut on goods from own brand, cheap series Xtra. Kiwi and Rema responded with their own price cuts. Arvin denies that Kiwi’s new, large price cuts, which they are now announcing, are based on Coop’s price cuts.
– We control prices based on our own strategy, she says.
In the future, it may also be cheaper in other stores:
– Of course we follow the price cuts for Kiwi, says Coop’s communications manager Harald Kristiansen to Nettavisen. Coop runs weekly price cuts, he explains:
– We have already cut some of these products next week, he says, and follows up with a twinkle in his eye:
– We also think it’s great that Kiwi wants to celebrate that Extra opens store number 500 at every moment. So we join and start the celebration already now.
The online newspaper has also contacted Rema 1000 – and we will update the case as soon as possible.
Below you can see which items Kiwi is cutting the prices of:
Takes a position in the market
When Kiwi implemented its third price cut, Nettavisen spoke with Tor Wallin Andreassen, professor at the Norwegian School of Management and expert in marketing and entrepreneurship.
He thought Kiwi’s price cuts could be very positive for the chain.
– It shows that they take social responsibility in the middle of a pandemic, at a time when many people are without income and an uncertainty about their income. In isolation, it is therefore a good move, he said.
At the same time, he said that it helps to build the brand attitude of people. Kiwi shows that they never give up on price, and drive towards Rema 1000, and that they are a socially responsible player.
– In sum, this helps to create a preference for Kiwi, in a product market that is otherwise completely flat and gray. This can help to increase the use of Kiwi as a supplier, Andreassen explained.
He also said that this will give Kiwi a marginal increase in sales and volume, and slightly better purchasing conditions or more power when purchasing.
– They can get more power to get suppliers to push prices, he said.
Feel free to say your opinion in the poll before you read on, the article continues below.
Complaints about purchasing conditions
Precisely this has been discussed several times. Kiwi is owned by Norgesgruppen, which is the country’s largest grocery player. The group also owns the chains Meny, Spar and Joker, and a total market share of 44 percent.
One and a half weeks ago, the Norwegian Competition Authority issued a new report, which showed that Norgesgruppen has better purchasing conditions than Coop and Rema from several suppliers. The differences they found in 2017 persisted in 2018 and 2019.
– The differences are significant for some suppliers. The calculated differences for 2017, presented in the 2019 report, were thus not a one-off case, the Norwegian Competition Authority writes in the report.
Kolonial.no manager Karl Munthe-Kaas believes the suppliers are part of the problem. He recently told Nettavisen that he thinks it is part of an agreed agreement that Norgesgruppen receives lower prices from the large suppliers in exchange for denying shelf space to the smaller competitors.
– They can more credibly threaten to take in, for example, Ariel detergent and make it a new brand in Norway. Therefore, Lilleborg (which is owned by Orkla, journ. Note) has to give Norgesgruppen a reasonable price, said Munthe-Kaas.
He receives support from Rolf Rune Forsberg, who owns Hval chocolate factory. He says that they have experienced being squeezed out in favor of a larger chocolate supplier – Nidar.
– We have been used in this game yes. In the way that Nidar has been threatened to provide better conditions so that no smaller suppliers will be taken in. We have entered Norgesgruppen’s stores, only to be thrown out again when Nidar has given them better conditions, he said.