FOOD aims to increase the understanding on how the introduction of internet stores offering food affects sales in traditional brick-and-mortar stores. Another question analyzed is whether the composition of products bought through the different channels differs. A master thesis is already written by Lundanes and Saltermark (2017) on this topic.

In a later thesis, Angelvik and Bytingsvik (2019) both map online customer characteristics, and estimate the willingness to pay for home delivery.

Norwegians living along the border to Sweden benefit from lower prices on the Swedish side of the border and undertake a significant share of their grocery shopping in Sweden. A research paper by Richard Friberg, Frode Steen and Simen A. Ulsaker examines the effect of cross-border shopping on grocery demand in Norway using monthly sales data from Norway’s largest grocery chain for the period 2011-2016. The study is published in American Economic Journal: Microeconomics.

The sensitivity of demand to foreign price is hump-shaped and greatest 30-60 minutes’ driving distance from the closest foreign store. Combining continuous demand, fixed costs of cross-border shopping and linear transport costs à la Hotelling they show how this hump-shape can arise through a combination of intensive and extensive margins of cross-border shopping. The conclusions are further supported by novel survey evidence and cross-border traffic data.

• In a later study Friberg, Halseth, Steen and Ulsaker use grocery data from Norway and COVID-19 border closings to gauge the effect of cross-border shopping on commodity tax revenue. Detailed store-category level data identify differential treatment effects that depend on distance to Swedish stores. Economically significant effects extend to up to two hours’ drive from the border, and even further for prominent cross-border shopping products as beer, cigarettes and soda. Across all products, cross-border shopping decreases tax revenue from VAT by 3.6% at the national level. National commodity tax revenue from carbonated soft drinks (subject to a sugar tax) is reduced by 8.1% and from cigarettes by 11.9%.
• There has also been written theses on border trade, by Bergset and Raddum (2021) and also the covid related effects of the border closure on sales due to changes in the sugar tariff (Stensrud and Mogensen, 2021).  

The grocery industry experiences that new store and chain concepts appear offering overlapping product categories with the traditional grocery stores.

In their master thesis from fall 2018, Walle-Hansen and Ankerud analyze how newly established Europris stores affect existing Kiwi stores’ performance. Later two theses have been focusing on how the Normal chain affects grocery store sales. Both Syverinsen and Eide (2019) and Lund and Lillegraven (2021) are looking at how newly established Normal chain stores affect MENY stores.

Evensen, Steen and Ulsaker has analyzed the effects of how new established or relocated Europris stores affect local grocery stores. They find interesting results where close by establishments increases grocery store sales and traffic (agglomeration forces) that are counteracted by competition effect as establishments happen further away. The analysis can be found here.

We work to establish better measures of productivity in the grocery sector. Partly by using data from SSB, but also by using data from the NG chains and by collecting data on the other chains. One master thesis on this topic looks at the SSB data and the internal NG chain data (Kay and Sørlie, 2017). Another master thesis focuses on differences in productivity and profitability across individual stores and chains, and examines how differences in ownership form affects these (Torsetnes and Vilhelmsen, 2017). 

We have also looked at how the introduction of self-check out (SCO) cashiers. Nøkleby and Søreng (2019) look at the efficiency effects. Johansen and Rød (2020) look at the effect on the shopping basket from introducing SCOs.

One of the chapters in ‘Mot bedre vitende i norsk matsektor’ (2020) presents new estimates productivity development for the food-value-chain.

There is a large focus on improving logistics and storage planning to reduce food waste. This is important for the profitability of the industry, but also for society at large. The project’s first master thesis on this topic focuses on the so-called ‘NG-flyt’ project, which automates the bread logistics at store level (Andersen and Aahjem, 2017).

Though there is a lot of work undertaken in the grocery chain to prevent stock out in stores this phenomenon is experienced across all stores at various times and across various products. This often implies loss of revenue when consumer either refrain from buying or move to other substitute products. Myhre and Østby (2018) calculate the revenue costs from stock out in stores. Recently, Osaland and Pedersen (2022) look at how the introduction of databars including also date of expiration, and digital warnings effect both sales and food waste.

The concern around food waste is increasing. Several measures are taken by the industry to reduce food-waste. Lund and Øi (2019) are analyzing how the ‘too-good-to-go’ project affect food waste in the MENY stores. Jakobsen and Jensen (2019) analyze the effects of reposition and sell single items of vegetables and fruit in MENY.

How does closeness of rival stores affect prices locally? By looking at store and regional demography, and prices in some local areas, we are able to track some of these price effects. So far this has been the focus of one of our master theses (Olsen and Olsen, 2017).

Vandvik and Mathisen (2018) analyze prices in local shops that are exposed to large seasonal shocks in demand due to influx of consumers during the Easter and summer holidays. The pricing strategies of these stores are compared with those of similar shops not exposed to similar demand shocks in these periods.

We have looked how the Norwegian grocery market compares to other Scandinavian markets. We have compared concentration, store availability and price and productivity development.

Partly we do this in the book ‘Mot bedre vitende i norsk matsektor’ 2020, and also in a very recent master thesis from 2022, where Jacobsen and Jansson compare the thre largest grocery chains in Sweden, Denmark and Norway.

In Norway as in many other countries, the grocery chains have chosen to apply national prices. The reasons are several, but the industry seems to focus at fairness as the most important reason. In his master thesis Meile (2020) look at this to both test whether this is indeed the case, and what potential gains could be achieved from departing from such a policy.

An increased digitalization of grocery stores allows for dynamic and individual price changes. How does this affect sales and prices? For instance, how will various pricing strategies affect the sales of perishable products to minimize waste? Will individualized prices benefit consumers or sellers? One master thesis (Chadoyan and Faramarzi, 2017) and one research paper (MAGMA, 2017) addressing these questions have so far been written.

In a newer thesis Elisabeth Daae and Ragnhild Leine Grebstad focus on how the Spar chain’s strategy of reducing bread prices just before closing time affect profitability and waste.

We have recently seen a large focus on price development and measuring inflation. ‘Shrinkflation’ has been discussed as a way of increasing prices by reducing packet sizes. Garborg and Gundersby (2021) has looked at this in their master thesis, to see what happens to sales when such package shrinking takes place.

There is a large focus on the use of price portals to increase consumer awareness on grocery prices. The benefit of price portals is twofold: consumers will better know which stores are cheapest, and products included in the portal is likely to become more competitive.

However, there are also worries that price portals may facilitate price coordination across chains, and that prices of products not covered by the portals will be hiked. The master thesis written by Dirdal and Kristiansen is analyzing this issue. Lately, Foros, Friberg, Kind and Steen (2022) published a paper (in Norwegian) in Samfunnsøkonomen discussing this topic. 

There is a large interest in how consumers react to economic shocks. For instance, in periods of higher unemployment, consumers might change shopping behavior. The might buy cheaper products, they might change from super markets to discount stores, or they might refrain from buying at all. This affects the actual cost of buying food, and in a situation where prices generally increases consumer might even face negative food price inflation.

In a new project Thor Aursland, Frode Steen and Simen A. Ulsaker (2021) have looked at how the oil shock and successive increase in local unemployment in some parts of Norway affected individual consumer behavior and perceived prices. The analysis can be found here.

How does loyalty programs affect consumers and their choices? In their master thesis, Chadoyan and Faramarzi (2017) collect information about loyalty programs and customer preferences through a survey. They also analyze the effects of individual price offers to NG consumers.

In another master thesis, Borlaug Skarbø and Sogn (2017) analyze the effects of the Trumf loyalty program’s tripling of bonus points on selected Thursdays. They investigate how consumer demand changes on these Thursdays, and in the days before and after.

Inga Kristine Godø’s master thesis compared the effectiveness of three different loyalty programs used by Norwegian retail chains. Her thesis is based on survey data.

There has been a large discussion on the potential scarcity of products in Norwegian stores as compared to other national markets. So far, we have focused on how peoples’ choices react to changes in product range. This is reported in a master thesis (Nyerrød and Tronstad, 2017).

Engelund and Eimind (2018) are analyzing a large consumer panel to establish how consumers’ store preferences develops over time. They find that the percentage of customers that have low-price stores as their favorite store, increases faster than the number of low-price stores available.

Norway stands out as compared to most other countries with regards to the national distribution costs and number of grocery stores. We have gathered information for Denmark, Sweden and Norway on demography, grocery concentration and number of shops over time to analyze to which extent differences in demography can explain differences across these three countries. In particular we compare number of stores within driving distance across Sweden and Norway.

This topic has been covered in a master thesis by Drager and Vågene, 2017, and also in the book ‘Mot bedre vitende i norsk matsektor’ 2020.

The government drastically changed the tax regime for products as soda, chocolate and several product groups with sugar content in January 2018. This increased prices and changed consumer behavior. Digranes and Tøstie (2018) analyze the overall effects of the changes in sugar taxes on soda. Stensrud and Mogensen (2021) combine changes in the sugar taxes and covid closed borders.

In an article in Praktisk økonomi & finans, No. 1, 2019, Frode Steen and Simen A. Ulsaker analyze how the sugar tax affected soda and chocolate products. They look to which degree the tax is passes through to consumer prices across different product groups and regions. They also look at the overall price and consumption effects.

The FOOD team is presently working on a new study where we focus on how consumer heterogeneity affects the effects of increased prices on sugar-products.  

Another interest is how consumers choose products that are considered healthier. Mageli and Haugli (2021) map the typical organic consumer. Helvik and Engevik (2020) estimate willingness to pay for ecological products. Later Eldrup and Jørgensen (2022) estimate willingness to pay for ‘nøkkelhullsprodukt’.