Money, Money, Money, The Average Consumer's Shopping Basket Cost is Skyrocketing
We have the data
For the second time this year, Kauppalehti published an article comparing prices in grocery stores across Finland with data provided by the A² Price Tracking Service. This latest article, released in July, featured the price differences of 41 branded products in 55 stores across Finland. They highlighted the increases in prices across different grocery chains along with the large variations in pricing between each chain.
Inflation, cost, and price increases are continuing to rise for the foreseeable future. The price of goods in many cases is already a euro higher than in January of this year. As mentioned in Kauppalehti’s article, the prices of many goods in June have risen almost 11% higher than last year.
A deeper dive into reality
Diving deeper into the current price increases in Finland helps give an overall picture of the current consumer goods market.
Utilizing A² Price Tracking data, we averaged the prices of the items featured below from several large Finnish retail chains: K-Market, K-Citymarket, K-Supermarket, Prisma, S-Market, Sale, and Alepa. Our expert product information team selected the most popular items (excluding private label items) from several staple categories for this analysis.
As seen above, in January 2021, the average cost of Sunnuntai’s Special Wheat Flour (2kg) was 1,77€, and in June 2022 that price was already 2,45€. As for Kariniemen’s Honey Marinated Chicken Fillet Strips (450g), in January of last year, the average price was 4,57€, and in June 2022 the price rose to 5,37€.
The trend continues for the rest of the included products. If you take a close look at the chart, you can see that for much of 2021, prices remained stable with only a few cents difference. When looking at this year the prices began to flux and rise quite rapidly. While the changes are not as large as in some categories (such as one coffee package which rose 47.5% in six months), this is notable since these products' prices have typically always remained stable and within a few cents’ range.
When looking at the assortments and category volume offered by various retail chains in Finland currently, it is hard to draw any conclusions yet, as any differences can be accounted for supply chain issues rather than the economic market changes. Later this year and early next year, it should be clearer how the increasing prices and costs of goods will affect assortment planning. For example, one change might be that we’ll be seeing the assortment width getting more narrow compared to 2022 and that assortment focus shifts to more affordable products within the category.
It’s time to adapt
This all makes one thing clear; increasing prices and category changes will have a substantial impact on consumer buying behavior and consumer goods companies must adapt. Additionally, these rising prices do not mean that trade promotions will become obsolete, but on the contrary, they are more important now than ever.
As mentioned in the Kauppalehti article, the Director of SOK’s grocery trade, Sampo Päällysaho explained that while the rising prices have not yet significantly changed consumer behavior, the decrease in demand for fresh fish (such as salmon) has lowered due to price increases, and cheaper branded products have sold more than in the previous year.
Mikko Käkelä, the CEO of the Finnish Food and Drink Industries’ Federation (ETL) mentioned that the food industry is facing unprecedented cost pressures. He emphasized that retailers and producers will need to adapt their cost structures to survive these rising prices.
FMCG (Fast Moving Consumer Goods) companies need to adapt their trade promotion strategy to ensure that their brands will last well into the future. We recently published an article detailing the rising costs and prices in the Nordics and how FMCG companies can address them.
A² Price Tracking
The A² Price Tracking solution (available in Finland only) supplies information on the level and development of consumer goods’ prices across Finland. Analyse² offers two types of tracking services; either a price study for a customized product group or a price study for the entire product group. The prices are collected from the retail chain's shelf labels at non-promotional pricing at the requested specified date. This service is customizable as well and can offer solutions for different situations such as when the need is to check the development and changes of selected products, the distribution of novelty products, or the shelf life or packaging dates for certain products. Learn more about A² Price and Assortment Tracking Services here (in Finnish).
Kauppalehti is a Finnish news site providing financial news and stock prices. The article mentioning Analyse² was published on July 21st, 2022. The article, "Suomalaisten ruokakori kallistui merkittävästi tammikuusta kesäkuuhun – Ketjujen välillä yllättävän suuria eroja hinnoissa” is available in Finnish and with a subscription here.