Norway Faces Higher Grocery Costs Than Germany, Lidl’s Return Could Disrupt Market
A recent price comparison reveals Norwegian shoppers pay significantly more for groceries than their counterparts in Germany, sparking debate over potential solutions – including the return of discount retailer Lidl. The analysis, conducted by Nettavisen, found a basket of 44 common goods cost NOK 2482 at Lidl in Germany, compared to NOK 3002 – a difference of NOK 520 – at Rema 1000 in Norway.
Meat Prices: A Surprising Twist
While Norwegians often voice concerns about the high cost of meat, the price test yielded a surprising result. Several meat products were actually more expensive in Germany. Specifically, meat dough, bacon, and entrecote all carried a higher price tag in German stores, with entrecote costing NOK 327.96 compared to NOK 305.00 in Norway.
“We Norwegians are good at complaining about the meat price, but maybe it’s not too bad,” noted a prominent consumer blogger, Rune “Gjerrigknarken” Nikolaisen, after reviewing the findings. He suggested that meat is frequently used as a loss leader by Norwegian retailers, a tactic less common in Germany.
Significant Savings on Key Staples
Despite the meat price anomaly, the overall picture painted a clear cost advantage for German shoppers. Of the 44 items tested, 32 were cheaper in Germany, with substantial savings on several staples. These included:
- Frozen pizza (Dr. Oetker): -50 percent
- Halloumi: -52 percent
- Wheat flour: -52 percent
- New potatoes: -58 percent
- Beer (Carlsberg): -63 percent
- Toastbread: -65 percent
- Beer (Tuborg): -67 percent
- Sugar: -67 percent
- Cucumber: -72 percent
- Mozzarella: -74 percent
- Klaset tomatoes: -87 percent
The Lidl Factor: A Nostalgic Hope?
The findings have reignited discussion about the potential benefits of Lidl’s return to Norway. The German discount chain operated in Norway from 2004 to 2008, known for aggressive pricing and promotional offers.
“I remember we traded squats for a penny, they had some lure offers like that,” Nikolaisen recalled. He believes Lidl could once again “make a break in the low price market” if they re-entered the Norwegian market, potentially forcing other retailers to lower their prices.
However, Lidl itself has indicated no immediate plans to expand to Norway, stating in an email to Nettavisen that they currently have no such plans.
Shifting Market Dynamics and European Trends
Grocery expert Ivar Pettersen of Alo Analysis suggests the situation has evolved since Lidl’s previous stint in Norway. He noted that prices in Norway are approximately 30 percent higher than in Germany, according to Eurostat data, but the gap is narrowing.
Pettersen also highlighted a surprising trend: dairy products, traditionally more expensive in Norway, are becoming increasingly competitive. In the Nettavisen price test, a small butter package was actually cheaper in Norway than in Germany.
He attributes this shift to global factors, including increased demand and production challenges, such as disease outbreaks that have impacted the EU more severely than Norway.
Tax and VAT Differences Contribute to Price Disparities
The price differences are also attributable to structural economic factors. Germany has a lower food VAT rate and significantly lower alcohol taxes than Norway. Rema 1000 purchasing director Line Aarnes acknowledged these differences, stating that German discount retailers operate under “completely different framework conditions.” She affirmed Rema 1000’s commitment to remaining the cheapest grocery provider in Norway.
Consumer Sentiment and Lidl’s Potential for Success
Nikolaisen believes consumer willingness to embrace discount retailers has increased since the early 2000s, and that Lidl itself has evolved, now offering a wider range of well-known brands. This shift in consumer behavior, coupled with Lidl’s updated strategy, could pave the way for a successful re-entry into the Norwegian market and a renewed push for lower grocery prices.
