Website for Comparing Grocery Prices Launches in Iceland

Verðgáttin

A new website where consumers can compare the prices of food items in three major grocery chains in Iceland has officially launched. The website features around 80 food staples and prices are updated daily. RÚV reported first.

Verðgáttin, as the website is called, shows the prices of products at three major grocery chains: Bónus, Krónan, and Nettó. Products include basics such as butter, bread, vegetables, fruit, and meat products where each brand is compared across all three chains. A browse through the prices reveals that for many products, the difference is no greater than a single króna: cream, for example, costs ISK 709 at Bónus but ISK 710 at Krónan and Nettó. The difference is more dramatic for a loaf of bread from the producer Mylla, however, sold at ISK 455 in Bónus but ISK 556 at both Krónan and Nettó. Grocery stores submit prices to the website daily, meaning that consumers will also be able to see the price changes over time.

While inflation measured 10.2% in Iceland over the past year, the price of many food staples has risen at higher rates. The price of dairy products, for example, rose 16% over the past year.  On Monday, the government of Iceland introduced a series of measures to fight inflation, a combination of spending cuts and tax hikes, as well as reducing the salary increases of senior government officials.

The website is part of an agreement between businesses and the Icelandic Centre for Retail Studies (Rannsóknarsetur Verslunarinnar, or RSV) to closely monitor the development of the price of essential consumer goods and was partially funded by the Ministry of Culture and Trade.

Temporarily Appointed State Mediator to Meet with Efling, SA Today

If a strike among oil and truck drivers, set to begin at noon today, becomes a reality, fuel could run out in the capital area as early as Thursday evening. Product shortages could also mean the closing of grocery stores, RÚV reports. Ástráður Haraldsson, the temporarily appointed state mediator in place of Aðalsteinn Leifsson, has called a meeting with representatives from the Efling union and the Confederation of Icelandic Enterprise (SA) this morning at 9 AM.

Isavia with fuel for 7-10 days

Barring any new developments, 500 hotel employees in Reykjavík and more than 70 freight and oil distribution truck drivers are set to go on strike at noon. The strike could have far-reaching effects in the Southwest corner of Iceland, RÚV reports.

According to information from Isavia – the national airport and air navigation service provider of Iceland – the company’s fuel reserves are sufficient to sustain operations at Keflavík Airport for seven to ten days. As noted by a press release from Efling yesterday, Efling granted 70 exemption requests yesterday evening (three were denied), but it remains to be seen whether Isava will file for an exemption. Among those who successfully applied for exemptions were the National Police Commissioner, the capital area fire department, the Red Cross, Strætó, the National Broadcaster (RÚV), and the winter service of the Icelandic Road and Coastal Administration.

Ástráður Haraldsson, the temporarily appointed state mediator in place of Aðalsteinn Leifsson – who stepped aside following a ruling by the Court of Appeal – has called a meeting with representatives from the Efling union and the Confederation of Icelandic Enterprise (SA) this morning at 9 AM. The Minister of Social Affairs and the Labour Market has stated that the government will not intervene in the dispute at this time.

Grocery Stores Could Close

Guðmundur Marteinsson, CEO of the grocery store Bónus, told RÚV that the store’s shelves are adequately stocked to last through the weekend. After the weekend, however, if there is a shortage of products in the capital area, stores may have to be closed.

In an interview with Fréttablaðið yesterday, Guðmundur stated that Bónus had been preparing for strikes by placing larger-than-usual orders. When asked if the truck drivers’ strike would affect some products more than others, Guðmundur replied that almost all of Bónus’ entire range of products would be affected. “We get products delivered every single day, there is not a lot of space to store large overstocks.”

Gas stations could run dry in a matter of days

An article on Vísir yesterday noted that the sale of gasoline and oil had increased significantly, with drivers having brought various containers to the pump in order to store gasoline in the event of a long strike. The CEO of N1, Hinrik Örn Bjarnason, told Vísir that customers could begin to feel the effect of the strike as early as this evening.

“I’ve been driving between our stations yesterday and today. Last night, I saw people filling up old oil drums. There have been a lot of different kinds of bottles and containers sold,” Hinrik Örn remarked.

Bónus Lengthens Opening Hours, Gives Mascot Controversial Makeover

As of Friday, Bónus will have longer opening hours. Vísir reports that the extension was announced to customers at the same time that the discount grocery chain unveiled that its mascot, the iconic Bónus pig—an off-kilter, droopy-eyed swine that appeared to be recovering from a hard night out—had undergone a makeover. But while the later shopping hours will undoubtedly be welcomed, not all locals are equally enthused about the popular porker’s facelift.

Bónus CEO Guðmundur Marteinsson says the chain extended its hours in response to calls from consumers. “This is the complaint we receive most often,” he explained. “But we’re cost-conservative and opening hours are part of the cost. But by keeping the opening hours within reasonable limits—we’re not extending them by much—we believe we can implement this without increasing the cost too much. Prices won’t change because of this adjustment.”

Previously, Bónus closed at 6:30 pm. From now on, however, seven Bónus locations will be open until 8:00 pm every day: in the capital area, Smáratorg, Skeifan, Spöngin, Fiskislóð, and Mosfellsbær, as well as Helluhraun in Hafnarfjörður and Langholt in Akureyri. The remaining locations will be open until 7:00 pm. In addition, Bónus will open an hour earlier on Sundays, or 10:00 am.

‘He was always a bit cockeyed’

The original Bónus mascot, via Facebook

Remarking on the controversial mascot transformation, Guðmundur said, “We’ve just streamlined him a little—it isn’t that big a change. We took out one or two lines that it’s always looked like we forgot to erase when he was initially designed,” he continued, pointing to a crinkle on the Bónus pig’s nose and an extra line on his back.

More dramatic, however, is the adjustment of the pig’s left eye. “He was always a bit cockeyed,” Guðmundur said. “But as I see it, this is part of our evolution.”

The brand’s font has also been adjusted, moving from a blocky serif font to a cleaner sans serif.

‘Long live the Bónus pig!’

Change does not always come easy, though, and some locals took to social media to mourn the mascot.

“What kind of sick joke is this?” wrote Hrafn Jónsson on Facebook. “You take one of the most iconic pigs of all time and mess with it? […] What kind of personality-less impostor is this?”

“Why can’t *anything* be left alone in this country?” tweeted @siggiodds. “What is the point/goal? Take the nuance, the history, and the humor away so you’re left with just an empty, generic shell?”

Rex Beckett

The transformation has also already inspired several memes. “Long live the Bónus pig!” proclaimed Rex Beckett on Facebook, screen-capping the messages she sent directly to the company. “I just wanted to say that I am extremely sad about the decision to change the Bónus Piggy’s look,” she wrote. “He was a delightful little weirdo with such a fun personality and his wonky eye made everyone happy. […] Please let us hang onto our old friend.”

‘There’s Plenty of Food’

The importation of food and goods to Iceland will continue unhindered, says the Icelandic Federation of Trade (FA). This comes per an announcement made on the Federation’s website on Friday, which aims to discourage Icelanders from hoarding food and goods while concerns about COVID-19 persist.

The announcement goes on to say that import companies in Iceland have received updates from their foreign suppliers outlining the measures being taken to ensure that there will be no interruption to the delivery of goods. Most large and medium-sized outfits have also taken internal measures to combat the spread of the virus, such as dividing their staff into different shifts so that they do not come into contact with one another and isolating the operations of different work sites. Many importers have also placed larger than usual orders for supplies that are on the Department of Civil Protection and Emergency Management’s list of desirable household supplies in the case of a flu outbreak.

Authorities’ request that Icelanders forgo stockpiling food and goods is particularly relevant in light of the recent state ban on public gatherings of more than 100 people, as crowding in grocery stores obviously makes it difficult for people to maintain more distance between one another. Following directives from the Department of Civil Protection and Emergency Management, staff members and/or employees of independent security companies will, in fact, begin monitoring the number of people entering or exiting shops and stores in order to prevent over-crowding. The number of employees working at any given time will also be monitored.

According to FA CEO Ólafur Stephensen, “the importation and supply status of essential goods is operating as per usual and so there is currently no reason to hoard goods.”

His assertion was seconded by Guðmundur Marteinsson, the CEO of the Bónus grocery store chain, in a TV interview on Thursday evening. “There are plenty of goods in the country,” he remarked. “There’s plenty of food. We don’t need to worry about this too much. We’ll take deep breaths, get through this together. The next few weeks are going to be difficult. But summer will come, and then everything will get brighter.”

 

Shortage of ‘First Class Icelandic Potatoes’ Say Grocers

The Icelandic Federation of Trade is calling for a suspension of duties on potatoes so that potatoes grown abroad can be imported at an acceptable cost to local consumers. RÚV reports that Iceland’s current potato crop suffered after a wet and cold summer last year. As such, locally-grown potatoes are not up to their usual standard and grocers and produce importers want to see customs duties adjusted accordingly.

“We have plenty of potatoes,” Gréta María Grétarsdóttir, CEO of the Krónan supermarket chain remarked. “But the quality of Icelandic potatoes is not as good as Icelanders are accustomed to…these are not the first class Icelandic potatoes that Icelanders are used to getting.”

 

Imported potatoes “30% more expensive than they need to be”

Guðmundur Marteinsson, CEO of the Bónus supermarket chain, echoed this sentiment, telling RÚV that he finds it strange that import duties on potatoes have not been waived for the time being, given that even the Sales Association of Vegetable Farmers (SFG) has support the idea.

In an announcement on its website, the Icelandic Federation of Trade stated that the Ministry of Industries and Innovation has not complied with requests from importers to suspend custom duties. The organization says this is to the detriment of consumers because imported potatoes will be more expensive. “It isn’t possible to import potatoes unless the duties are cancelled,” said Guðmundur. “We started complaining three weeks ago.”

“When this situation arises, it often happens that customs duties are lifted,” explained Gréta María. “But not now. As such, foreign potatoes are 30% more expensive than they need to be.”

 

No Shortage of Potatoes

By law, the Advisory Committee on the Import and Export of Agricultural Products, which is part of the Ministry for Industries, submits proposals to the minister regarding suspensions of custom duties. This happens, for instance, when there is a shortage of a specific agricultural product on the domestic market. Per the provisions of the laws governing agricultural products, this can only happen when two leading distributors and two key producers cannot keep up with demand. The committee says, however, that no such shortage exists. The situation is being closely monitored, they say, and new data on the local potato crop will be obtained on April 23.

“It’s very strange because SFG’s largest retailer has sent a letter to the committee in which it urges for tolls to be cancelled because there are not enough potatoes of an acceptable quality,” said Guðmundur. “There aren’t enough, but there are some. We’re scraping together what we can for the weekend,” he said, referring to the Easter holiday this week. “That’s where we’re at.”

Ólafur Stephensen, the CEO of The Icelandic Federation of Trade, had stronger words for the committee. “Saying that there’s no impending shortage is preposterous,” he wrote in the published announcement. “And it means that importers are losing the precious time it takes to order and bring into the country products that meet consumer demand.”

Says Supermarket Collusion Keeps Prices High

Silent consultation between low-cost retailers in Iceland keeps prices artificially inflated, says Auður Ava Ólafsdóttir, project manager of price oversight at the Icelandic Confederation of Labour. Supermarkets Bónus and Krónan take advantage of a small market to keep prices high when they could be lowered, Auður stated in an interview on RÚV morning radio today.

“These two parties are in a very similar place in terms of prices and they naturally only see it in their favour to keep prices in a certain place,” stated Auður. “Although these are low-cost retailers in Iceland they could actually be lowering prices more than they are.”

“There is leeway here in Iceland for price reductions, as we saw when Costco came to the country. It’s cheap to import goods and the króna is strong. There are many factors that should have the effect of reducing prices, yet prices have remained quite stable for many years.”

This is because Krónan and Bónus take advantage of the Icelandic market’s lack of competition, Auður says. “They’re careful not to compete with each other’s prices too much because both parties would lose out. It is to the economic advantage of both to have it that way and they can do it by virtue of their strong position.”

Auður says she hoped Costco’s opening in May of last year would lower prices over the long term, but the wholesale retailer’s effect seems to have been temporary. Prices “took a little dip until they opened and into the fall and then rose again and are back to a similar level as before.”

Guðmundur Marteinsson, Bónus’ CEO, says the small price difference between products at Bónus and Krónan can be attributed to both companies lowering prices as much as possible. “There is no leeway for price reduction,” he stated. “We cannot sell products at below cost.” He pointed out that Costco’s recently published annual financial statement showed a loss of ISK 100 million ($900,000/€780,000).

Gréta Margrét Grétarsdóttir, CFO of Festi, also denies the two retailers are artificially inflating prices, insisting the similarity in price between the stores is a result of active competition rather than consultation.