Norway – the Black Sheep in the Scandinavian Grocery Industry : A Comparative Study of Profitability, Efficiency, and Productivity in the Scandinavian Grocery Market
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- Master Thesis 
The prevalent view of excessive profits in Norwegian grocery chains has made it an important matter for politicians, competition authorities, and the media. It is often claimed that the competition in the Norwegian grocery industry is weak. This is often justified by claims of high prices, lack of international actors, and poor product selection compared with other countries. This thesis aims to convert perception to the corresponding financial figures, comparing them with Norway’s neighboring Scandinavian countries. Drawing from the findings the thesis aims to contextualize the debate, in which many unsubstantiated claims and arguments are more common than actual data. The method is based on analyzing five to ten years’ worth of financial data from the three largest actors in each country. Using key financial ratios to provide valuable insight into comparing the countries and their evolution over the past five years. Accompanying the financial ratios, the thesis also analyzes labor productivity trends in each enterprise over the past ten years. Analyzing the price development of food and non-alcoholic beverages in Scandinavia, we found that Norway had the steepest decline in prices. From August 2021 to August 2022, we found that the price growth in Denmark and Sweden were significantly higher than in Norway. Gross margins vary considerably between different grocery chains. However, the difference seems to be more correlated with the negotiating power with food suppliers and whether the grocery chains have a store operating in a premium segment. We found that the largest actors have the highest gross margins. Furthermore, the thesis observes a converging trend in operating profit. Throughout the observation period, most of the firms present operating profits in a four to five percent range. There are fluctuations, yet there seems to be a convergence that all grocery chains are hovering around. However, the largest actors are not able to convert advantageous margins into higher profits. The labor productivity development of the Norwegian grocery chains is relatively strong in the period 2011-2021. NorgesGruppen and Rema 1000 are only outperformed by ICA, while Coop Norway was outperformed by Rema 1000 Denmark in addition to the three aforementioned chains. Our findings provide context and refute the idea of abnormality and unethical profiteering in the Norwegian grocery market.