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COST OF LIVING

Swedish grocery giants to cut prices on hundreds of items

Swedish supermarket chains Ica and Coop vowed to lower prices on a range of items, following a similar move by Lidl last week.

Swedish grocery giants to cut prices on hundreds of items
Cheese is one of the items affected by the price cuts. Photo: Caisa Rasmussen/TT

Ica on Monday morning said that it would cut prices on more than 300 items by between 5 and 25 percent, starting April 11th and lasting at least two months.

It said bread, poultry, cheese, cured meats, sauces, dry goods, baby food and hygiene products would be affected by the price cuts.

Ica is the largest supermarket chain in Sweden with around 36 percent of the market share. Ica franchisees are allowed to independently set their own prices, so the number of items affected and their actual cost will vary from store to store.

The price cuts come after Finance Minister Elisabeth Svantesson urged Swedish supermarkets to follow Lidl’s example, after the chain (which owns about 5-6 percent of the market) last week announced it would lower and freeze prices on more than a hundred items from March 27th.

Coop also announced on Monday that it would lower prices on all fresh fruit and vegetables by 12 percent for its members. Coop’s price cuts will start on March 30th and apply throughout April.

Household grocery bills are soaring in Sweden, as The Local has previously reported. Prices of food and non-alcoholic beverages last month rose 21 percent year-on-year, the biggest increase since the 1950s, eclipsing even the high-inflation years of the 70s.

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PROPERTY

For sale: New record as flood of apartments hits the market in Sweden

A flood of new homes are being listed as up for sale in Sweden as sellers and buyers eagerly hope for an imminent interest rate cut.

For sale: New record as flood of apartments hits the market in Sweden

A record number of apartments were available on Sweden’s main property listings site last month.

A total of 32,233 apartments were listed for sale on Hemnet in April, 40 percent more than the same month last year and the highest number ever for a single month. A lot of these ads are however for upcoming sales rather than apartments that are already up for public viewings.

“The high supply is an effect of a long period of a sluggish market rather than a risk factor for new price drops. This spring we’ve been seeing both rising prices and more activity. Especially as a result of the fact that we appear to be at peak interest rate and that the first interest cut is drawing near,” writes Hemnet market analyst Erik Holmberg in a comment quoted by Swedish news agency TT.

ESSENTIAL TIPS:

The previous record month was October 2023, when a total of 31,985 ads were posted on Hemnet.

The Local has previously reported that Swedish property prices are also on the rise as the market kicks into action.

A major reason behind the flood of apartments for sale is the expectation that Sweden’s central bank, the Riksbank, will soon slash the country’s main interest rate. While this is expected to bump up prices, it is on the other hand also likely to lead to lower mortgage rates.

EXPLAINED:

The Riksbank will announce its next decision on Wednesday.

This is a crucial announcement as the so-called policy rate is the bank’s main monetary policy tool. It decides which rates Swedish banks can deposit in and borrow money from the Riksbank, which in turn affects the banks’ own interest rates on savings, loans and mortgages. 

Sweden’s policy rate is relatively high at the moment, 4.0 percent (the highest since 2008), because of the Riksbank trying to bring down inflation. If bank interest rates are high, it’s expensive to borrow money, which means people spend less and as a result inflation drops.

But now that inflation is on its way down, Riksbank chiefs themselves have said that they think it’s likely that they will cut the policy rate in either May or June, and several economists predict that the cut is going to come sooner rather than later, which would mean this week.

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