Research

Research

The FOOD team is presently working on several topics.

  • Online food sales

    Online food sales

    FOOD aims to increase the understanding on how the introduction of internet stores offering food affects sales in traditional brick-and-mortar stores. Another question analyzed is whether the composition of products bought through the different channels differs. A master thesis is already written by Lundanes and Saltermark (2017) on this topic.

    Presently Fredrik Angelvik and Maren Pedersen Bytingsvik are working on determining which factors are important for the choice of buying grocery online.

  • Border Trade

    Border Trade

    Norwegians living along the border to Sweden benefit from lower prices on the Swedish side of the border and undertake a significant share of their grocery shopping in Sweden. A research paper by Richard Friberg, Frode Steen and Simen A. Ulsaker examines the effect of cross-border shopping on grocery demand in Norway using monthly sales data from Norway’s largest grocery chain for the period 2011-2016.

    The sensitivity of demand to foreign price is hump-shaped and greatest 30-60 minutes’ driving distance from the closest foreign store. Combining continuous demand, fixed costs of cross-border shopping and linear transport costs à la Hotelling they show how this hump-shape can arise through a combination of intensive and extensive margins of cross-border shopping. The conclusions are further supported by novel survey evidence and cross-border traffic data.

  • Productivity and Innovation

    Productivity and Innovation

    We work to establish better measures of productivity in the grocery sector. Partly by using data from SSB, but also by using data from the NG chains and by collecting data on the other chains. One master thesis on this topic looks at the SSB data and the internal NG chain data (Kay and Sørlie, 2017). Another master thesis focuses on differences in productivity and profitability across individual stores and chains, and examines how differences in ownership form affects these (Torsetnes and Vilhelmsen, 2017). Together with NIBIO, the FOOD-team will look closer into productivity statistics and use microdata to generate new productivity figures.

  • Logistics

    Logistics

    There is a large focus on improving logistics and storage planning to reduce food waste. This is important for the profitability of the industry, but also for society at large. The project’s first master thesis on this topic focuses on the so-called ‘NG-flyt’ project, which automates the bread logistics at store level (Andersen and Aahjem, 2017).

    Though there is a lot of work undertaken in the grocery chain to prevent stock out in stores this phenomenon is experienced across all stores at various times and across various products. This often implies loss of revenue when consumer either refrain from buying or move to other substitute products. In a recent thesis from fall 2018, Renate Skjolden Myhre and Åse Margrethe Østby calculate the revenue costs from stock out in stores.

  • Food Waste

    Food Waste

    The concern around food waste is increasing. Several measures are taken by the industry to reduce food-waste. Presently Mette Viddal Øi and Kjersti Maite Lund are analyzing how the ‘too-good-to-go’ project affect food waste in the MENY stores.

  • Local competition

    Local competition

    How does closeness of rival stores affect prices locally? By looking at store and regional demography, and prices in some local areas, we are able to track some of these price effects. So far this has been the focus of one of our master theses (Olsen and Olsen, 2017).

    Olav Vandvik and Martin Lysne Mathisen, 2018 analyze prices in local shops that are exposed to large seasonal shocks in demand due to influx of consumers during the Easter and summer holidays. The pricing strategies of these stores are compared with those of similar shops not exposed to similar demand shocks in these periods.

  • New Competition

    New Competition

    The grocery industry experiences that new store and chain concepts appear offering overlapping product categories with the traditional grocery stores. In their master thesis from fall 2018, Mia Meyer Walle-Hansen and Henriette Cecilie Ankerud analyze how newly established Europris stores affect existing Kiwi stores’ performance. In an ongoing thesis work, Magnus H. Syverinsen and Kjetil Lund Eide are looking at how newly established Normal chain stores affect MENY stores.

    The FOOD team is presently working on an extended study of the Europris case, involving the whole market with many more stores and where local customer demographics is controlled for.

  • Dynamic Pricing

    Dynamic Pricing

    Digitalization of grocery stores allows for dynamic and individual price changes. How does this affect sales and prices? For instance, how will various pricing strategies affect the sales of perishable products to minimize waste? Will individualized prices benefit consumers or sellers? One master thesis (Chadoyan and Faramarzi, 2017) and one research paper (MAGMA, 2017) addressing these questions have so far been written.

    In a newer thesis Elisabeth Daae and Ragnhild Leine Grebstad focus on how the Spar chain’s strategy of reducing bread prices just before closing time affect profitability and waste.

  • Price portals

    Price portals

    There is a large focus on the use of price portals to increase consumer awareness on grocery prices. The benefit of price portals is twofold: consumers will better know which stores are cheapest, and products included in the portal is likely to become more competitive. However, there are also worries that price portals may facilitate price coordination across chains, and that prices of products not covered by the portals will be hiked. The master thesis written by Cato Dirdal and Thomas S. Kristiansen are analyzing this issue.

  • Unemployment and Food Price Inflation

    Unemployment and Food Price Inflation

    There is a large interest in how consumers react to economic shocks. For instance, in periods of higher unemployment, consumers might change shopping behavior. The might buy cheaper products, they might change from super markets to discount stores, or they might refrain from buying at all. This affects the actual cost of buying food, and in a situation where prices generally increases consumer might even face negative food price inflation. In a present project Thor Aursland, Frode Steen and Simen A. Ulsaker are working on how the oil shock and successive increase in local unemployment in some parts of Norway affected individual consumer behavior and perceived prices.

  • Loyalty programs

    Loyalty programs

    How does loyalty programs affect consumers and their choices? In their master thesis, Chadoyan and Faramarzi (2017) collect information about loyalty programs and customer preferences through a survey. They also analyze the effects of individual price offers to NG consumers.

    In another master thesis, Borlaug Skarbø and Sogn (2017) analyze the effects of the Trumf loyalty program’s tripling of bonus points on selected Thursdays. They investigate how consumer demand changes on these Thursdays, and in the days before and after.

    Inga Kristine Godø’s master thesis compared the effectiveness of three different loyalty programs used by Norwegian retail chains. Her thesis is based on survey data.

    The FOOD-team is presently working on a project where we will estimate structural models where we empirically analyze the effect of coupons.

  • Product range and Grocery Store Preferences

    Product range and Grocery Store Preferences

    There has been a large discussion on the potential scarcity of products in Norwegian stores as compared to other national markets. So far, we have focused on how peoples’ choices react to changes in product range. This is reported in a recent master thesis (Nyerrød and Tronstad, 2017). We plan to look further into this topic by following individual buyers’ consumption patterns.

    In a recent thesis from fall 2018, Valeria Engelund and Viktoria Time Eimind are analyzing a large consumer panel to establish how consumers’ store preferences develops over time.

  • Concentration and demography

    Concentration and demography

    Norway stands out as compared to most other countries with regards to the national distribution costs and number of grocery stores. We have gathered information for Denmark, Sweden and Norway on demography, grocery concentration and number of shops over time to analyze to which extent differences in demography can explain differences across these three countries. So far the results are presented in a master thesis by Drager and Vågene, 2017. Together with NIBIO we plan to write a new article where we focus on this topic.

  • Health Conserns

    Health Conserns

    The government drastically changed the tax regime for products as soda, chocolate and several product groups with sugar content in January 2018. This increased prices and changed consumer behavior. In a recent master thesis Martin Jøndal Digranes and Gustav Tøstie analyze the overall effects of the changes in sugar taxes on soda.

    In a forthcoming article in Praktisk økonomi & finans, No. 1, 2019, Frode Steen and Simen A. Ulsaker analyze how the sugar tax affected soda and chocolate products. They look to which degree the tax is passes through to consumer prices across different product groups and regions. They also look at the overall price and consumption effects.

    The FOOD team is presently working on two new studies where we focus on how consumer heterogeneity affect the effects of increased prices on sugar-products.  

Published papers

Authors Title Publication

Øystein Foros, Hans J. Kind, Frode Steen

Individuelle priser i dagligvaremarkedet

MAGMA, 2017, (4), 44-49

Frode Steen, Simen A. Ulsaker

Sukkeravgiften» skal øke statens inntekter og redusere sukkerforbruket – men virker den?  [The new sugar tarrif – supposed to reduce sugar consumptio – but does it work]

Praktisk økonomi & finans, Vol. 35, 1/2019

Working Papers

Authors Title Publication

Richard Friberg, Frode Steen, Simen A. Ulsaker

Hump-shaped cross-price effects and the extensive margin in cross-border shopping

Discussion Paper 29/2018, Department of Economics, NHH