Grocery store price war is costly

CoopCoop.Photo: Norway Today Media

The discount grocery store chains are using several hundred million kroner on price and bonus wars, however, the Management believes it will give an increase in sales and will make it worthwhile in the long run.

After Rema introduced customer program Æ, Kiwi and Coop soon released their own customer loyalty programs.

The food chain Meny also presented a rebate program earlier this week. The money will runs out when supermarket chains increasing discounts, writes Dagens Næringsliv.

– Doubling of the bonus on fruit and vegetables alone will cost us a three million digit kroner amount in 2017, says the Kiwi General Manager Jan Paul Bjørkøy, but emphasizes that they have no plans to change the discount they have adopted on fruit and vegetables.

-The Goal is to obtain more and more satisfied customers, and when we sell more, so does our bottom line, he says.

Coop’s discount chain Extra is also giving discounts on fruit and vegetables.

– In January we had a record number of customers in our stores, and a 20% growth in sales of fruit and vegetables, so this helps to make up for the three million-digit kroner that the bonus costs, says chain’s Director Christian Hoel.

Rema is selling groceries for around NOK 65 billion a year, but with a discount of 10% on what the customers shop most, this will soon appear on the turnover.

– We invest in having satisfied customers, and we will continue with Æ says Rema Communications Director Mette Fossum.



Source: NTB scanpix / Norway Today