Parts of the article content might not be accessible, for example, with a screen reader.
According to the outcome of Yle’s food price comparison exercise, the German budget chain Lidl had slashed prices on 21 of the 31 items in the sample food basket. Trailing Lidl, the S Group had cut prices on 16 products carrying its Rainbow house brand, while Kesko group had lowered prices on 10 of its Pirkka food items.
However calculated in euros, the biggest savings could be found on the S Group’s 16 cheaper goods, and the total price of its food basket also declined the most – but not enough to beat the low-price items in a Lidl basket.
According to the Yle food basket study, compared to last year an individual shopping at Lidl saved just five euros, however he or she would have saved 49 euros buying the S Group's Rainbow products and 24 euros on purchases of Kesko's Pirkka products. Overall however, the Lidl food basket would have cost 522 euros during the year, compared to 553 euros at S-Market and 627 euros at K- supermarket.
Four a couple the savings buying Lidl in-house products would have amounted to 10 euros compared to 2014. Buying Rainbow and Pirkka products would have saved 70 and 37 euros respectively. The total food basket costs at Lidl, S-Market and K-supermarket were 785, 835 and 934 euros respectively.
In particular, Yle’s comparison determined that consumers saved more on purchases of milk products as prices underwent deep cuts: the cost of milk and cheese products went down for all brands. Shoppers also forked out much less at the till for eggs, rye bread and sugar. Coffee-lovers on the other hand found themselves paying more for their java.
The price reductions for most other individual products were for the most part marginal, Yle found – ranging from a few pennies to a few dozen cents. However as every prudent consumer knows, those cents add up over a period of months or even a year to offer savings amounting to tens of euros, depending on the size of the household.
Consumers to enjoy more savings
“We have been able to reduce prices because we’ve effected major savings. Additionally producer prices for milk and cheese have declined. We will aim to keep bringing prices down. However we’re not aiming to become another Lidl, because we want to maintain a broad product range,” explained Ilkka Alarotu, S Group’s product range director.
So far Kesko, Finland’s second-place food retail market giant hasn’t made as much noise about its price reductions as the market leader S Group. The company won’t admit to engaging in a price war with its competitors.
“Lowering prices are normal practice for us and we don’t have to make a fuss about it. We would like to pass on all the savings from marketing and other costs to the customer. Quality is also important for us,” said Kesko development director Harri Hillman.
The duopolists also point out that they also have other, cheaper in-house brands that were not included in the Yle comparison. The Kesko and S Group representatives said that there would have been a smaller gap between their baskets and Lidl’s, if their more of their cut-price products had been included.
Although the domestic market leaders are doing what they can to prevent Lidl from gaining further ground – and customers – in the Finnish market, Lidl says it’s not giving up.
“We will reduce our prices if we need to. The market will determine that,” said Lidl director Timo Hansio.
Kesko’s Pirkka provides most local products
Yle’s comparison showed no change in the domestic content of the food merchants’ products compared to last year. Of the 341 products in the comparison basket, Kesko’s Pirkka range offered the highest number of homegrown products at 20, followed by the S Group’s Rainbow selection with 17. Lidl trailed with just 12 Finnish products.
According to Kesko’s Harri Hillman the focus on domestic products is an important cornerstone of its offering. However Lidl’s Hansio stressed that his company focuses on providing shoppers with the best possible products, regardless of origin.
“Of course if Finnish products are competitive we would happily include them and we support Finnish producers in offering their products in Lidl outlets in other countries,” Hansio said.
