The price war between major discount grocery stores in Iceland reached a milestone yesterday when Kronan, Bónus and Kaskó set the cost of one litre of milk below one krona. Two weeks ago, before Kronan announced its price war, one litre of milk cost about 70 kronur. Last week, the price dropped to 26 kronur.
Supermarkets Kronan, Bónus and Kaskó limited the number of milk liters available to each customer, however. According to Ólafur Örn Arnarsson, manager of the Skeifan Bónus store, this was done to make the milk available to families, and not to shop owners who were using Bónus as a wholesalers.
Price cuts are not universal across all products, and Morgunbladid reported two weeks ago that there would be a limit to how far price wars could go, as all grocery stores operate through the same wholesalers. Presumably, Bonús, Kronan and Kaskó are selling many products at a loss.