Food prices decline while grocery sales continue to grow
In March, food prices declined in Sweden for the first time in almost three years. Despite the decline in prices, grocery sales have continued steadily over the last nine months: 6,7% year-on-year (YoY) growth. The price competition initiated by ICA seems to work in favour of the customer and the overall market.
This means the sales volumes dragged for over two years and accelerated for the fourth consecutive month.
In March, online declined after an encouraging start to the year in January and February. However, the first quarter of the year saw online return to a healthy 4,8% growth. This was driven by both home delivery (+5%) and Click & Collect (+4,6%).
This resulted in online gaining a 4,7% share of the overall grocery market in Sweden.
Total online sales stood at 3,8 billion SEK in Q1 2024. This is still significantly less than during the height of the pandemic (5,1 billion SEK in Q1/2021) but 70% more than during pre-pandemic Q1/2020.
It remains to be seen who will benefit most from the declining food prices. Will it be the retailer who drops the prices the most, or will the market turn towards other things (such as services or speciality products) rather than prices?
