Food and drink have become much more expensive in the past year, a recent report shows. But this may have only been a foretaste, because according to researchers, prices will increase further this summer.
Many have noticed how the prices of most things have skyrocketed recently. It has noticeably become more expensive taking a trip to the grocery store.
It is a daily topic of conversation that the prices of food in particular are perceived to have risen significantly more than the official figures for inflation that the authorities provide.
This impression is confirmed by a report from Sifo, an institute for consumer research. Here it appears that the prices of the most necessary food and drink items have increased more than twice as much as the general price increase.
NTB-Marie De Rosa reports on the issue.
We see a significant price increase for consumer goods. Cost increase in the reference budget for “food and drink” for the example family is 15 percent from February 2022 to February 2023, says researcher Marthe Hårvik Austgulen to NRK.
This is bad, but there is more to come: Researchers think the shops will raise prices even more this summer, the researchers inform NTB.
Expect a sharp price increase
I absolutely believe in a sharp price increase in July, says researcher Alexander Schjøll at Oslo Met.
It may sound strange, but the price increase has been artificially low, especially now in May. The grocery chains have held back and now they have to try to adjust, Schjøll continues.
He does not dare to predict how big the price increase will be, but believes it could quickly end at the same level as in February. Then the price increase was lower than first thought. But the money tends to be looser in the summer, he points out.
In July we are in holiday mode and grocery consumption is different. We don’t follow the prices as much. At the same time, people are generally more price conscious now and that will be able to push prices down again, says Schjøll.
“Backlog” in the grocery industry
Food researcher Ivar Pettersen in Alo Analysis also believes we will see a price jump this summer.
We must expect that we will see a marked price rise for food on 10 June, which will then apply to the prices in May, says Pettersen.
Like Schjøll, Pettersen points out that there is a “backlog” in the price increase for food and beverages from this spring, which must be made up in the future. The reason is that the price increase at the supplier level has been stronger than the price increase for consumers, he explains.
The price increase in April was unusually high and is due to the Kiwi supermarket gradually lifting its price lock. But the adjustment of the price level towards the consumer was not completed in April, so everything indicates that we will also get a price increase for May, says Pettersen.
Prices may increase by 5 percent
The food researcher believes that we will see a more moderate price increase in June, before there is another, sharp jump in July. Then the price increase in this year’s agricultural agreement will be implemented.
We must expect that on 10 August we will receive data for July which will show a fairly high price increase. It can actually rise to over 5 percent in one month. Historically speaking though it is not unlikely, says Pettersen.
The actual and perceived increase is in practice greater for many products, as the industry has a tendency to “round up” when a given percentage is applied.
Prices usually fall again in August. But there are several uncertainties that can affect exactly that, he continues.
It is impossible to know whether there will be a new round of price wars in the retail sector so that July this year will be different than before. It is not inconceivable that we will have a new Kiwi campaign in July, says Pettersen.
Improvement in sight
Schjøll at Oslo Met highlights three reasons why food prices have increased so much recently:
- High energy prices, which make it expensive to produce and transport food
- The war in Ukraine, which pushes up the prices of raw materials.
- The general cost increase.
(Many will think that here he should also have gone a little deeper with regard to energy prices and the role of the so-called green shift in the whole. But there are probably limits to where such a researcher can dare to poke with regards sensitive issues).
But there is improvement in sight, let us believe Pettersen. He points out that the international price picture shows a sharp fall in the prices of basic foodstuffs such as grain and maize, as well as fertiliser and energy used in food production.
In the medium term, perhaps half a year, the rise in food prices should decrease. But I don’t know how long it will take before it hits the market, he says.
For some Norwegian consumers, it has now also become more difficult to solve the problem of high Norwegian prices by travelling to Sweden and shopping there. The weak Norwegian krone has meant that the advantage is much lower.