Food price elasticity - a lottery ticket with few winners?
The fact that the consumer pays too much for many goods in the grocery stores is clear. The Swedish Competition Authority says it does not know in a large article in DN but now the authority will seek sharper tools to follow the price increases in the food trade.
This type of tool already exists today, we offer it free of charge to all consumers directly on the mobile phone says Michael Kärrberg, CEO of Foodrunners.
Foodrunners follow the prices of over 300 000 food products on a weekly basis across almost all Swedish food chains and the arrows generally point strongly up. The fact that food is more expensive is now well known. But price elasticity is not nearly as familiar to the consumer - yet.
"We have had a very strong growth on the user side in recent months. We see that Foodrunners and our industry colleagues are increasingly visible in the media, mentioned more in social media and engaging the consumer at new levels," says Michael Kärrberg.
The price comparison company Foodrunners has technology to measure both individual goods but also larger bags over time. But what Foodrunners also does is to look in detail at the price elasticity between different food chains and within the chains are also analysed different concepts such as ICA Maxi, Coop X:tra and City Gross.
"The price elasticity between chains and stores is not nearly as well known as a general increase in prices," says Michael Kärrberg. "We think that this is as big a problem as the Swedish Competition Authority points out, even if they are not quite right that there are no tools. Foodrunner's app exists, it is free of charge and it works for the majority of Swedish consumers."
One example Foodrunners choose to demonstrate is the price of Bregott during an 8 week period between week 23 and 30 2022. Foodrunners here look at the whole brand Bregott and all its products and sizes. The example compares Bregott in 1019 stores from 13 different store concepts and the result is disappointing. The overall price elasticity between chains amounts to 29.8%.
"It's incredible numbers and very disappointing for the consumer. But it gives us more energy to continue our work and we think we're adding something very valuable to the consumer with our app. We have many upcoming updates that will further improve the consumer's awareness of price, but a little later we want to add health and environmental aspects to the service. We believe that the combination of price transparency and transparency in miöjö and health impact is the future When we get there, we hope to be able to become for the food consumer what other global Swedish tech companies have been for music and payment solutions, for example, concludes Michael Kärrberg, CEO of Foodrunners.
Foodrunner's mission is to help consumers find better products and prices in the grocery store. Each month we help tens of thousands of consumers to find better and cheaper goods, and to save money by comparing prices on your purchases and offering you the right price on delivery options.
Our vision is to be someone you can always trust - independent and credible - when comparing food products regardless of in-store or online. We think what we do is very exciting - e-commerce is growing strongly in the surges of the COVID-19 pandemic and we want to continue helping shoppers to make wiser decisions regardless of the trading venue and chain.