Recently, with the release of relevant economic data from Nordic countries, many Nordic consumers have begun to realize that the increase in the daily cost of living is not an illusion, and the pressure of inflation is gradually transmitted, which is finally directly reflected in the food prices that people consume every day.

Price rise and consumption “downgrade”

In recent years, many Finnish residents feel more and more pressure when shopping, because the price of many foods has been rising since last year, and it seems that there is no end in sight. Finnish local media reported the record of food consumption of a consumer living in Turku in the past year. Through comparison, it was found that almost all food prices had risen in the past year. For example, the price of a bag of chicken chops in January 2022 was 2.69 euros, which rose to 3.89 euros in July and 4.29 euros in December.

The official statistics of Finland have further confirmed the consumption feelings of residents. According to the data released by Statistics Finland, by the end of December 2022, Finland’s overall inflation rate was 9.1%, while the food inflation rate reached 16%. The price rise is particularly reflected in the food price, which is 16.5% higher in December 2022 than a year ago. Christina Nieminen, chief actuary of Statistics Finland, said that the price of basic foods had indeed risen, with cheese prices rising by 25%, eggs prices rising by 37% and butter prices rising by 36%.

The rise in food prices in Finland has subtly changed the consumption habits of residents. Kaya said that the rise in food prices forced her to give up buying some higher-priced ingredients and reduce the number of meals outside. The Finnish Grocery Association recently released a report that the consumption of fish, vegetables and meat by Finnish residents in 2022 was significantly lower than that in 2021.

In Sweden, food prices have also risen significantly. According to the survey report published by the Swedish “food price inspection” website, the food price in Sweden rose 1.4% in January 2023, which is one of the largest monthly increases since the inflation surge in January 2022. Some commodities with relatively moderate inflation last year suddenly became very expensive in January this year. For example, the price of onions rose by 19%, and the price of tomatoes rose by 12%. According to the data released last month by the Swedish Bureau of Statistics, Sweden’s annual inflation rate in December 2022 was 12.3%, the highest level since February 1991.

Norwegian grocery chains and suppliers warned that some food prices could rise by 10% from February due to various factors. According to the tradition of Norwegian chain stores, wholesale purchase prices will be adjusted in February and July every year, so many food prices will change significantly in February. Since 2021, the price of groceries in Norway has increased by 11.5%. Meanwhile, the consumer price index (CPI), a measure of overall inflation, rose 5.9% between December 2021 and December last year.

Causes and countermeasures

The Finnish economic forecast report issued by the Bank of Finland at the beginning of the year pointed out that Finland’s inflation rate will rise further in 2023. The reason is that the rise of energy and raw material prices and the long-term interruption of the supply chain lead to the general rise of consumer prices. Although the decline of crude oil and raw material prices will slow down the rise of inflation, the high cost of electricity will keep the price pressure high. Some price pressures will spread and eventually shift to the prices of food, consumer goods and services. In a consumer confidence survey conducted by the Bank of Finland, respondents believed that it was a particularly bad time for consumers, and consumers’ willingness to buy durable consumer goods was very low. If Finland’s high inflation lasts longer than expected, the reduction of consumer purchasing power and private consumption may be greater than expected, and the duration will be longer, which will make the economic recession more serious than expected.

However, the report of the Bank of Finland also pointed out that, from the perspective of expectations, inflation will slow down in 2023, but since the price rise in 2022 has spread from energy commodities to other economic sectors, there is great uncertainty in the forecast. Yurki Nemi, an expert of the Finnish Institute of Natural Resources, analyzed that prices this year should be stable at least before the end of the year. The rapid rise in food prices last year was affected by the Russian-Uzbekistan conflict and the poor harvest of crops in some regions. The rise in energy prices has indirectly raised prices, and the prices of fertilizer and feed are also rising, which has affected the prices of consumer goods. “If the global grain harvest returns to normal this year, food inflation should stop in the second half of the year.”

In Sweden, the economic community had expected inflation to remain high, but the recent price data of food and non-alcoholic beverages surprised the Swedish central bank. Many analysts pointed out that the main performance of the current Swedish economy is the decline in real income and the sharp decline in housing construction. Although Sweden’s loose fiscal policy may slow down the economic downturn, high inflation will make it difficult to effectively balance the economy and people’s livelihood.

The Norwegian government began to meet with representatives of the chain store industry in January this year to discuss the price rise of key consumer goods such as food, hoping to make the grocery industry aware of its social responsibility to consumers and ensure that it does not harm the interests of consumers while making profits. However, the retail industry also has its own difficulties. The higher costs of energy, transportation, commodities and raw materials have forced suppliers and supermarkets to raise product prices.