Swedish Trade: You were wrong about food prices
Published 2023-08-27 06:30
Now the conclusion is here, Elisabeth Svantesson, Magdalena Andersson, and you others who singled out the grocers as greedy. You were wrong about the food prices. An apology would be in order, writes Martin Kits at Svensk handel.
DEBATE. Elisabeth Svantesson, Magdalena Andersson, and Nooshi Dadgostar: Now the conclusion is here. You were wrong about the food prices. An apology would be in order!
In a time of galloping inflation, fueled by the pandemic and Russia’s war of aggression against Ukraine, the prices of pretty much everything have gone up. Fuel, seed, fertilizer, raw materials, and other inputs have made every part of the manufacturing and processing chain more expensive.
On top of that comes a currency that has fallen sharply against the euro and the dollar, which further fueled the increase in purchase prices.
This has created a tough situation for many households, not least when the price increases for food have hit at the same time as interest rates have risen and the price of electricity has skyrocketed. In short, it is a situation that no one wants.
From that perspective, it is easy to understand that politicians like to find scapegoats. We understand the political game. But to single out an entire industry as greedy without basis is plain and simple both immoral and unjust.
The truth is that the grocery trade has, in fact, done exactly the opposite of what almost the entire political establishment has insinuated.
Instead of “taking care to raise prices more than was warranted,” traders have cut their own margins to razor-thin levels to contain, as far as possible, price increases.
In other words, the prices have been raised significantly less than what the own cost increases actually justified.
New statistics from Statistics Norway confirms that profitability in the grocery trade has declined sharply – despite food prices rising.
On average, the grocery stores had an operating margin of 1.5 percent of turnover during the first quarter of this year. That’s a drop of two percentage points in one year – and this from already low levels. In addition, interest costs and tax must be paid in before the question of profit even becomes an issue.
For many traders, especially in rural areas and in our smaller towns, the question is, therefore, not about how big the profit will be – but whether the shop will even survive until next month.
We know it is because we talk to them every day. Those who struggle to maintain community services in a small town. Those who go to bed with a lump in their stomach from worry about being forced to reduce staff. Those who struggle with the rampant costs of the crime that politics has so far been unable to crack.
The politicians’ focus should be on how they can create the right conditions for trade companies to grow and create even more jobs, not least for the country’s young people.
The heightened rhetoric not only led to extensive damage to the entire industry’s reputation. It also contributed to pure hate campaigns, among other things orchestrated by activists on the extreme left. Threats and hatred – in social media, in the streets, and squares and directly against the staff in the stores quickly became a bitter part of everyday life.
The trade is not afraid of being scrutinized. And of course we don’t believe that leading politicians and thinkers in the media have courageously incited people against the trade. But words can be powerful weapons. Unfortunately, it is clear to us that the barrage wrongly directed at the grocery trade has left deep wounds. It is obscene.
So to all of you contributors to the drive, finance ministers, party leaders, and self-proclaimed experts. Take a look in the mirror and consider whether decency requires you to actually apologize.
Martin Kits, head of business policy and opinion formation at Swedish Trade
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