Swedish grocery stores near the Norwegian border are bracing for an exceptionally busy Easter period, potentially reaching unprecedented levels of activity.
The anticipated surge in shoppers is driven by Sweden’s upcoming reduction in the value-added tax (VAT) on food, coinciding with a traditional influx of Norwegian consumers seeking more affordable groceries.
The largest supermarket catering to Norwegian shoppers has already outlined its preparation plan. “Yes, we need to prepare well,” says Patrik Zäll, manager of Nordby Supermarket, to Nettavisen. “We understand the prices a few days in advance, so if an item costs 19.90 [Swedish krona], we know exactly what it will be reduced to.”
Digital Signage and Overnight Shifts
According to Zäll, 95 percent of the store’s price tags are electronic and will update automatically. However, the remaining tags will require manual changes, alongside the placement of numerous promotional posters.
“We are preparing paper price tags in advance so that we can change them the evening before or during the night,” Zäll explained. “There will be some extra work on the day the price change occurs, but everything will be updated and ready in the cash registers from the morning.”
GJØR FORBEREDELSER: Påsken er alltid travel. Denne gangen blir den enda travlere for butikksjef Nordby Supermarket, Patrik Zäll Foto: Erik Molland (Nettavisen)
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Historically Low Food VAT
Sweden is reducing its food VAT from 12 percent to 6 percent. By comparison, Norway’s food VAT remains at 15 percent. To ensure the tax cut benefits consumers and isn’t absorbed by retailers, Sweden has established a dedicated commission.
The commission, led by the Swedish Consumer Authority, will monitor prices. If the full VAT reduction is passed on to customers, prices should decrease by 5.4 percent starting April 1st.
Patrik Zäll assures customers that Nordby Supermarket will reflect the full reduction.
“Customers will receive the full VAT reduction, of course,” he stated.
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“Strange” Prices on Shelves
However, a 5.4 percent price reduction will result in somewhat unusual price points.
“Most Swedish stores round prices to 90 or 95 öre,” Zäll explained. “When we now deduct the VAT, the prices will be very uneven. An item that costs 19.95 [Swedish krona] today will have a completely different and more ‘strange’ number on the label. It will seem a little special on the shelves.” He further elaborated:
“An item costing 19.95 will perhaps cost 18.88, and something costing 24.95 will cost 23.61. It will be a special transition, but very beneficial for customers.”
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Uncertain if Record Will Be Broken
Despite the anticipated impact of the VAT reduction, Zäll isn’t certain a recent sales record will be set.
“What are your expectations for this year’s Easter sales?”
“We believe it will be a very quality Easter. We were a little unsure at first, but the VAT reduction will undoubtedly have a major impact. Easter is always a big holiday for us, so we expect good traffic as usual, regardless of weather or wind.”
“Do you think you will break last year’s record?”
“I think it will be a good Easter, but it’s uncertain whether we will beat last year. Last year was a fantastic Easter, but then wage payments fell in the Easter week itself, which is not the case this year.”
Concerns for Industry, Land, and Sea
The Swedish VAT reduction is causing concern for Norwegian grocery stores and the Norwegian food industry.
“I fear that cross-border shopping will receive a vitamin boost from the Swedish VAT reduction,” says Petter Haas Brubakk.
He is the managing director of NHO Mat og drikke, which organizes large parts of the Norwegian food industry.
“It first affects the grocery trade, but it reaches all the way to agriculture, fisheries, and the industry we represent. So less turnover on the Norwegian side, less production, less volume in stores, and that stores along the border become even more vulnerable,” he says.
Calls for Government Action
While Sweden is cutting VAT and Denmark is providing food checks, both measures are intended to support consumers amid high food prices. Denmark has also taken steps to curb cross-border shopping with Germany.
“I believe it is high time that the Norwegian government revisits its own Hurdals Platform from 2021. It stated that it would follow the Danish example and analyze the causes of cross-border shopping and implement measures against it,” says Brubakk.
“Denmark reduced taxes on certain Danish products that particularly contributed as lure goods in cross-border trade with Germany. They have succeeded in getting more trade back to Denmark. The Norwegian government has not lifted a finger here since 2021,” he says.
