Grocery manager raises concerns over market dynamics in Iceland

The manager of a new low-cost grocery store has expressed concerns about the market dynamics in Iceland, stating that an unspoken agreement exists among major retailers to exclude new competitors. Greeta María Grétarsdóttir, the CEO of Prís, explained that established chains receive significant discounts from wholesalers and manufacturers, making it more economical for her store to source goods from competitors rather than directly from wholesale suppliers.

She indicated that there is pressure on new entrants to refrain from disrupting the market, which suggests that current retail and wholesale players are doing quite well financially. Prís aims to minimize overhead costs in order to offer lower prices. This strategy involves simplifying store operations and reducing staffing in certain areas.

In terms of pricing strategy, Greeta emphasized that Prís is focused on finding goods that do not incur additional costs. The store plans to introduce new international products where competitive pricing is lacking for well-known goods within Iceland. While she could not guarantee fixed prices, she assured that they would monitor price fluctuations closely.

Greeta acknowledged the need for businesses to be profitable, which includes covering employee salaries and taxes while creating added value. However, she criticized the notion of excessive profits, highlighting recent reports indicating a substantial year-on-year increase in profits for competing companies. This situation raises concerns about the sustainability of competition in the grocery market as new players like Prís attempt to carve out their niche.