This report is written in Swedish but it has a summary in English.

Starting in the first half of 2022 and continuing until at least the middle of 2023, food prices have risen significantly. These price hikes influence both consumer behaviour and the strategies adopted by grocery retailers to, at least, maintain their margins. Additionally, the price hike potentially impact competition in the food market (the grocery market).

This report utilizes barcode data for centrally packaged meat and milk, along with aggregated data for food, to investigate whether:

• Grocery retailers' margins have increased.
• The market power has shifted among food retailers.
• The market power has changed between food retailers and food industry.

The analysis indicates that consumers' price sensitivity is low. In other words, consumers largely continue to purchase food to the same extent despite higher prices. However, the substantial price hikes seem to have heightened price consciousness among consumers, leading them to increasingly turn to cheaper products and stores when buying milk and centrally packaged meat. This shift has resulted in discount chains increasing their market shares, thereby intensifying price competition on the Swedish food market. Furthermore, consumers opting for cheaper products has increased the market share of private label brands (PLs) in grocery retail. Finally, the study does not provide support for the notion that food retailers as an industry have “seized the opportunity” to increase their margins. There may although be exceptions across retailers and food products.

This report is written for the Swedish Competition Authority.