Swedish shoppers head to Norway for cheaper groceries

Norwegians have long been crossing the border and filling their shopping baskets in Sweden. However, thanks to soaring food prices, Swedes are now heading to Norway to try and slash their grocery bills.

Groceries meats
The surge in food costs in Sweden is having a beneficial impact on commerce in Norwegian border areas. Photo by Alan Alves on Unsplash

In Norway, the “harryhandel” phenomenon – travelling across the border to shop and take advantage of lower prices in Sweden – has a long tradition.

However, the recent spike in food prices in Sweden is reversing this trend, and Swedes are heading to Norway, according to the finance section of the Swedish newspaper Expressen

In Norway, the annual price increase for food and non-alcoholic beverages fell from 12 to 8.8 percent in February. This is significantly lower than the price increase in neighbouring countries.

In Sweden, the annual price increase for food during the same period ended up at 21.6 percent, which has led to more Swedes going to Norway to buy cheaper food. 

READ MORE: Why are food prices in Sweden going up so much more than elsewhere?

Furthermore, the Norwegian krone has weakened considerably against the Swedish krona. Between now and February last year, the Norwegian krone is down seven percent against Sweden’s krona. 

Bananas, broccoli, red peppers, carrots, oranges, muesli, and diapers, are among the products that are now cheaper in Norway than they are in Sweden, according to Expressen.

A manager of a Rema 1000 supermarket close to the Swedish border told Norwegian public broadcaster NRK that dairy products and Norwegian seafood were popular with Swedish shoppers crossing the border. 

What caused the price difference?

There are several reasons why Swedish food prices have risen more than Norwegian ones.

Norwegian customs duties on agricultural products lead to Norway being more shielded from international price fluctuations on products such as cheese and milk.

Typically, this has meant that Norway has had higher prices for food due to less competition, but now this can help keep prices lower for specific products in Norway.

Furthermore, competition between grocery chains is also a potential contributor to price development.

The second largest grocery chain in Norway, Kiwi, chose not to raise prices in February. This forced both Coop Extra and Rema 1000 to follow suit. Supermarkets in Norway raise prices wholesale twice a year, once in February and once more in July. 

Meanwhile, food prices in Sweden have seen their biggest spike since the 1950s. Prices of eggs, dairy products, and fats have risen more than 30 percent. Sugar has risen by just under 50 percent, and cauliflower is around 80 percent pricier than a year ago.

A lack of competition among Swedish supermarkets and an increase in the cost of importing goods are both considered to be factors behind the price hikes. 

Shopping in Sweden is still cheaper overall

With these recent price developments, some may ask whether shopping trips from Norway to Sweden may be a thing of the past.

Overall, it is probably still cheaper for Swedes and Norwegians close to the border to shop in Sweden. 

However, shoppers need to be more attentive, as not everything is cheaper in Sweden anymore – something which used to be the case just a year ago.

“Food is probably not cheaper in Norway, but the increase in food prices has been significantly lower in Norway than in Sweden over the past year,” Bendik Solum Whist, head of the supermarket and grocery sector at Virke, a trade industry organisation, told NRK. 

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What Norway’s weak krone means if you are travelling this summer 

Norway’s krone is down considerably to almost all major currencies. This affects how cheap or expensive your trip in or out of Norway will be this summer. 

What Norway’s weak krone means if you are travelling this summer 

Compared to 30 other major currencies, the krone has weakened against all except the Argentine peso and the South African rand, according to an overview of the “expanded major” currencies from Bloomberg. 

The Norwegian krone is considerably weaker against the euro compared to a year ago. The cost of a US Dollar or UK pound has become over a krone more expensive since February. 

Norway’s krone is also down to the Swedish krona and Danish krone. The Danish krone is fixed to the euro, so it is performing well against Norway’s currency. Meanwhile, the Swedish krone has become more valuable than the Norwegian krone. 

Low gas prices, higher interest rates in other countries than in Norway, and uncertainty in the world financial markets have all contributed to Norway’s weak krone. The weak krone will have a massive impact on anyone with travel plans this summer. 

If you travel outside Norway, you can expect your travels to be considerably more expensive. 

“This year the holiday will be expensive. Plan your summer on the basis that you will get less for your money this year than you did last year – much less,” Cecilie Tventenstrand, savings and consumer economist for Storebrand, recently told Norwegian broadcaster TV 2

If you are travelling from Norway and your main income is paid in krone, you can expect everything to be more expensive due to the exchange rates. 

Insurance firm Fremtid has recently issued a reminder that cancellations due to the weak krone or low money in the account are not covered by their policies. 

“If you just change your mind, you will not get any money back on the travel insurance. Then you have to contact the travel operator and investigate whether you can get money back,” Therese Hofstad- Nielsen said in a recent press release. 

Consumer economist Tvetenstrand said that travellers from Norway to other countries should try to pay with a card this summer. 

“Always pay in foreign currency. If you pay in Norwegian currency, you pay a higher exchange rate. Always also pay by card, preferably a credit card – just remember to transfer money to it straight away. The exchange fee is often higher at the ATM,” she said. 

Things are a lot more optimistic if you are travelling to Norway this summer (unless you are paying in Argentine pesos or South African rand). 

You can expect better value for your money as your currency will likely strengthen against the Norwegian krone. This means a cheaper trip to one of the most expensive countries in Europe. 

One way to take advantage of the weak krone is to consider a bank account which doesn’t charge foreign transaction fees or allows you to transfer your currency into krone. This is much more helpful than exchanging for cash, as cash isn’t widely accepted in Norway. 

Therefore if you bring a large amount of cash, you could end up stuck with it and lose out when you exchange your leftover kroner back for your preferred currency. 

READ MORE: How tourists in Norway can take advantage of the weak krone to save money

One plus (or negative) is that the krone is unlikely to see a drastic strengthening anytime soon. Dane Cekov, an analyst with the bank Nordea, told E24 that the krone was likely to continue on its current trajectory. 

“We believe that the roller coaster ride will continue for the Norwegian krone through the summer,” he said. 

As an example, he predicted that one euro could cost as much as 12.3 kroner or more during the summer. 

Meanwhile, Nils Knudsen, the currency strategist from Handelsbanken, told TV 2 that the krone would struggle until the global economy picks up. 

“It is connected with the fact that we have not received any particularly good news from the global economy. Therefore, we need to have some good news before we can say that the krone can recover in the short term,” he explained.