Thousands of shoppers in Sweden are boycotting the country’s largest supermarkets to protest rising grocery prices, which they attribute to an “oligopoly” of retail giants prioritizing profit. While grocer associations maintain that the continued price increases are driven by external factors, some of which are beyond retailers’ control, state authorities flag competition issues. 

According to Matpriskollen, a Swedish independent price tracking app, food costs have increased 22% since January 2022.

“At the moment, there are some products such as coffee, cocoa, and olive oil wher supply distortions have taken place that are driving the current food price inflation,” Arvid Fredenberg, chief economist at the Swedish Competition Authority, tells Food Ingredients First.

The boycott began on social media on March 17, when protesters encouraged people to stop shopping from stores like Lidl, Hemköp, ICA, Coop, and Willys.

Inspired by similar protests in Bulgaria and Croatia, dissatisfied consumers in Sweden called on the public to avoid shopping at supermarkets during the 12th week of this month as part of “Bojkotta vecka 12” or Boycott Week 12 and live on the food in their freezers instead.

The movement has gained significant political momentum, with Swedish government officials holding talks with F&B giants to address the cost-of-living crisis and rising anger among various consumer groups.

What is driving the price rise?

The Swedish Food Retailers Association (Svensk Dagligvaruhandel) says supermarkets recognize consumers’ challenges, but the boycott targets “symptoms rather than underlying causes.”

“Allegations of profiteering are not supported by the financial reality. Profitability among grocery retailers has declined as food prices have risen, with stores currently running on tight margins averaging just above 2%. Hundreds of stores are operating at a loss. We actively advocate for a fact-based discussion about conditions in the food value chain and the reasons behind price increases,” Cecilia Anneling, communications manager at the association, tells Food Ingredients First.

According to Anneling, various external factors are driving the price hikes. Some of these, she explains, include the war in Ukraine, supply chain disruptions, increased input costs, climate shocks, increased logistical expenses, and a “weak” Swedish krona pushing import prices up.

“Climate impacts, especially affecting global harvests of products like coffee and cocoa, combined with the weaker Swedish krona, contribute significantly to increased prices. Many of these pressures are consistent across Europe. Since 2021, food prices have increased more in 18 out of 27 EU countries than in Sweden,” she points out.

Coop, one of the retailers being boycotted, reiterates that poor harvests have pushed up prices of raw materials and food such as vegetables and grains.

“It [the price hike] is also about extreme weather wher drought and extreme temperatures have affected harvests globally, for example, tomatoes in Italy, coffee in Brazil, cocoa in West Africa, and olives in Southern Europe,” Marcus Björling, press secretary, Coop Sweden, tells us.

“The Swedish krona has been very weak for several years and made imported goods more expensive, affecting both finished and input goods.”

He adds that the war in Ukraine has shaken up world markets for raw materials, grain, energy, and fertilizer, sectors wher Russia and Ukraine dominate production.

Fredenberg agrees with this analysis and notes that the trend of increased prices “is not unique to Sweden.”

“Following Russia’s full-scale invasion of Ukraine in February 2022, the prices of certain input goods rose dramatically. This led to suppliers raising prices in the grocery trade, and the grocery trade, in turn, raised its prices for consumers. This led to very high price increases at the consumer level,” he explains.

A concentrated market?

However, the Swedish Competition Authority flags that, beyond climate and geopolitical factors, the market structure and competitive environment are keeping prices unjustifiably high.

“We assess that these effects at the consumer level — that prices have increased more than can be justified by increased costs at the production level — would not have occurred if competition had been better in the grocery trade,” notes Fredenberg.

The three largest retailers — ICA, Axfood, and Coop — together account for nearly 90% of the food retail market in Sweden, according to Axfood’s website.

“It is difficult to enter the market, both on the national and local levels. The low threat of entry limits the competitive pressure on the big players, says Fredenberg.

On whether retailers can be expected to consider immediate changes to the pricing strategy in light of the protest, Anneling says the Swedish Food Retailers Association actively advocates for greater transparency and consumer engagement while retailers determine their pricing strategies.

“Retailers continue to increase promotional activities and discounts and offer more affordable product alternatives. We have proposed several policy measures to alleviate price pressures and enhance competition within the Swedish food market, such as simplifying the store establishment process, reducing employer contributions for younger workers, aligning national regulations strictly to EU minimum standards, and streamlining regulatory oversight.”

As frustration grows, protesting consumers have launched “Boycott 2.0” starting March 24, according to social media posts. They aim to add a new supermarket chain to their boycott every week and emphasize buying local. 

“We take matters into our own hands. We’ll start with ICA — then we’ll take the others,” the protesters assert.