Norway’s currency, the krone, has suddenly regained strength in recent weeks and that, combined with a sharp rise in food prices at Norwegian grocery stores this summer, has set off a new wave of shopping across the border in Sweden.
After diving along with oil prices two years ago, the Norwegian krone that had been super-strong through the oil boom years weakened to a point that it was worth less than the Swedish krone. It cost as much as NOK 105 to buy SEK 100 just last spring. Now, however, the krone has strengthened to the point that SEK 100 only costs around NOK 96.
Food prices up, too
At the same time, food prices in Norway have risen considerably in recent months, especially those for dairy products, meat and even fruit and vegetables in season. Salad that sold for around NOK 20 in May now costs as much as NOK 27.90 in Oslo grocery stores.
Consumers are thus responding by heading over the border, especially when they’ve had time off from work this summer. The parking lots at Swedish shopping centers close to the Norwegian border are packed with cars bearing Norwegian license plates, and Swedish merchants are reporting booming business. State broadcaster NRK also reported this week that more Norwegians are driving over the border in Northern Norway to buy cheaper goods in Finland.
Swedish prices are already lower on most all items, and the selection of items is greater, so the currency exchange advantage comes as a bonus. Lind said his store, about a 90-minute drive south of Oslo, is logging its best summer ever.
‘Striking’ complaints over the higher Norwegian prices
It’s mostly the higher prices at home, though, that seem to be sending Norwegians over the border.
Lind said he’s looking forward to the autumn, since he thinks the gap between Norwegian and Swedish prices will widen even more. Many contracts between the grocery stores and their suppliers expire in September, and he predicts both sides will try to raise prices again. There also are fewer grocery players in Norway now, since ICA pulled out of the market. Most ICA stores were taken over by Coop, and prices have risen on a wide variety of items.
Currency analysts, meanwhile, think the Norwegian and Swedish currencies will stabilize. The Norwegian krone is also much stronger against the US dollar than it has been earlier this year. While it cost more than NOK 8.50 to buy a dollar a few months ago, it cost NOK 8.16 at midday on Tuesday.
Source: newsinenglish.no
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