A comparison of the grocery market

The Northern countries are well-known for being significantly more expensive than the densely populated countries in the south. When I arrived here, I did actually miss the variety of cheap no-name products and the number of discount supermarkets in Germany. (Btw. this lead me to the topic for my thesis)

During my stay here, the Finnish newspapers announced that the prices for groceries would drop by 30%. The German discounter Lidl seems to put tremendous pressure on the market. However I still didn't notice a big difference. Whenever I am standing at the cashier, I am calculating in my head how much my purchase would have cost in Germany. I usually come to the conclusion that the expenses for groceries would be a lot less pricey.
To prove this properly, I decided to conduct an experiment! I created a list of products an average citizen (in my case an average student) would buy and looked up the prices in local supermarkets in Turku, which belong to the two parental retailing organizations S-Group and Kesko and of course Lidl. I also assigned a friend in Germany to go shopping for me. Of course we agreed that we would always take the cheapest product - as we are students :P
This is what we found out:

Product	German price	Finnish price
Bananas (1Kg)	1,25	1,29
(Rittersport) Chocolate	0,99	1,55
Haribo Gummibears (360g)	1,19	1,99
Basmati Rice (1Kg)	1,99	2,79
Milk (1L)	0,59	0,85
Butter (250g)	0,99	0,93
Yoghurt (500g)	0,49	0,69
Oats (500g)	0,39	0,54
Yeast (for baking)	0,09	0,20
Flour (1Kg)	0,32	0,81
Sugar (1Kg)	0,65	0,85
Eggs (10)	0,99	1,05
Spaghetti (500g)	0,49	0,44
Barcadi (0,7 L)	12,99
Q-tips (200 pieces)	0,49	0,49
Toilet paper (8 roll-package)	1,95	2,49
Gasoline	1,40	1,52
Diesel	1,20	1,34

In 2013, the value of grocery retail sales in Finland was approx. 16.55 billion euros. There are two big Finnish grocery retailers. The S-Group and Kesko. The S-Group owns Alepa, Prisma, S-Market and Sale. Kesko is the parental organization to the K-Supermarkets, they have several different names e.g. K-Citymarket, K-Supermarket, K-Extra etc. Besides those big players, there is also Lidl.
Take a look at the table below to get a better view of the Finnish grocery market and the powerful influence of the German retailer Lidl.

All numbers 2012	Market share	Grocery sales	Employees
S Group	45,6%	7.316.000	8.897
Kesko	34,7%	5.572.000	19.489
Lidl	6,7%	1.071.000	3.500 (141 stores)

Source: Finnish Grocery Trade 2013

What you can not see from this table is that Lidl is growing at great pace. In 2011 the market share has been at about 6,4%. In 2012 it increased to 6,7%. So Finnish people actually appreciate those inexpensive products from Germany. No wonder as the value added tax is currently 14% in Finland. This is 3 times higher than the EU average of about 5.4%. Three decades ago Finns spend as much as 20% of their income on food.
In Germany, Lidl doesn't have the unique selling proposition of being the cheapest discounter. It is just one of many supermarkets. However the perception of the value of goods might be influenced by this price difference. When talking to Finns, they are always stoked about the low price level in Germany. This is ascribed to the dense population as well as to the intense competition on the German market, which is missing in Finland. Nevertheless, due to the increasing growth of city areas there might be even more competitors on their way to the Finnish market?!

On that note no matter where you live - consume wisely! ;)

Raisa