The Grocery Food Market in Norway
I would say that the grocery market in Norway is a whole big competition. There’s a few big chains, such as Rema 1000, ICA and Kiwi, along with some other chains and small grocery shops in people’s neighborhoods. It’s hard to know who is the biggest, because in a grocery shop, prices mean everything. People want it cheap, and people want choices. With as many big shops, we get choices, and we get choices in the shop as well. Choice to choose quality, choice to choose the cheapest.
In the UK, Tesco is today a monopolist in the market; they have over 30% share in the market. But in Norway, none of the companies have a remarkable bigger share than the other. The market is an oligopoly, meaning that the market is dominated by many large companies, all of them being oligopolists. You can’t say if the market is elastic or inelastic, because it’s different departments. But for example normal groceries suck as milk etc. , the market is very much elastic.
People won’t buy it if it’s a huge difference in price, but all of this has to be together with quality. People know what they have in grocery stores, and they’re most often aware of what supermarket is the cheapest and also aware of what they want – quality or quantity. The grocery food market in Norway – cheap chains versus expensive.
Our demand for cheap or expensive chains is very unpredictable. 1. Place factor – where is the chain? Is it near yourself? 2. Demand for that particular chain increases in the area because there’s not any options. . Supply of groceries depends of ability of the firms to respond market demand, and of course, the grocery market will always be there, it’s just a competition, who are going to win the audience? 4. Time element – some suppliers can respond quickly to market demand – other cannot. If there’s a product that is very popular at the moment, the chain who has the most of it will be the winner. 5. It is very important to have complementary goods in the market. That will make your sales even higher.
In demanding one good, the costumer would be likely to demand another good. Look at Kiwi and Jacob’s in Norway for examples. In the area I live, these two are competitors because they are the only two grocery chains in the area. Kiwi is a quite cheap chain with cheap groceries, while Jacob’s focus on more expensive products with better quality. JACOB’S Supply and demand – more exclusive chain, demand will always be the same even though prices go up because people like quality. There will be less quantity but higher price, but people would still want it.
Supply will shift upwards because there’s an increase of cost. Price will be higher both because they know people would still buy it, and because they need to cover the high costs. Exclusive products are more expensive, and they keep on rising. ANOTHER OPTION Rise in the cost of production, supply shift upwards. This might be because there are luxury groceries, and they will charge a high price to cover the costs of quality. Less demand for luxury brands and supply will also shift. This will probably be because a change in income.
Quantity will be less, price slightly more. Even though what happens, there will be a quite high price. KIWI – cheap chain Supply and demand for Kiwi. More people want cheap groceries, of course. More demand for cheaper groceries, and supply will also shift. Quantity will be more, price slightly less, than for example Jacob’s a swell. People want it so they are able to sell more; therefore they need more quantity. There’s very hard to get into the market, both locally and in a bigger span.
There’s a few that dominates, but actually, there’s not many “exclusive” chains, so that’s a gap in the market in Norway. There’s not really any competitors for Jacob’s, but their aim should be to get people to focus on quality so that they can get customers from the cheap chain market. Competitors for Kiwi, on the other hand, are many. You have Rema 1000, for example. For Rema 1000 it’s important to be where people live. Groceries are very demanded, so it’s important to be where people shop. Conclusion
Right now, there’s more people wanting to buy cheaper groceries; this is because there’s less money because of lack of jobs, and people have to be more careful with it. Jacob’s have gone down the last few years, but they’re loyal customers will always be there, who are the rich people in Norway. Kiwi will also always have many customers, because they have many stores all over Norway. But they need to look after their competitors, because there’s many small and cheap chains that focus on price rather than quality in order to get a bigger market share!