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31 • Denmark: Discount Culture in Danish Grocery Market On 31 May 2012, the Danish Compeon and Consumer Authority (DCCA) published a report on the culture of discounts and adversing campaigns in the Danish grocery market. The report invesgates the effect of unaddressed adversing material on Danish grocery prices by reference to six other European countries and on the behaviour of consumers and businesses. The DCCA has asked the consultancy firm, Nielsen, to determine the effect of unaddressed adversing material in the Danish grocery market. The analysis is based on bar code data from two thirds of the total turnover in the Danish grocery market. Such a comprehensive assessment of the effects of discounts in the grocery market has previously not been carried out. The analysis has shown that grocery prices in Denmark are approximately 4-6 % higher than the average of seven EU-countries (Belgium, Denmark, Finland, France, Italy, the Netherlands and Germany), when Eurostat prices (Purchasing Parity Prices, PPP) are corrected for VAT and excise dues, taking into account the high Danish wealth and that more products are sold on adversing campaign (adversing campaign products cover products whose prices are reduced by over 5 %, products promoted with a special placing in the store or products in adverts with special offers) in Denmark, which is not taken into account in the Eurostat PPP. These results indicate that compeon and efficiency either in the Danish grocery market, or in the markets that produces groceries, is not at level with comparable European countries. The Danish grocery market exhibits a more pronounced culture of discounts and adversing campaigns. One third of all products are sold on adversing campaign in Denmark. The average is approximately 20 % in Germany, Italy, Sweden, France and Belgium. As a result, the Eurostat prices for Danish groceries are corrected downwards with 1-3 percentage points. The pronounced discount culture thereby only explains a smaller part of the price difference. Discounts, and the markeng of discounts, are very important compeon parameters for the Danish grocery chains. The use of unaddressed adversing material is, all else being equal, seen as a sign of compeon among the exisng grocery chains. For consumers to be able to strengthen compeon on the grocery market, a certain amount of consumers must be acve and make demands on price and quality towards businesses. That also benefits the less acve consumers. For a lile over one third of the consumers, the choice of grocery shop is affected by certain products being discounted, while approximately 60 % of the consumers state that they “oſten” or “always” read unaddressed adversing material from the grocery chains according to a survey conducted by the DCCA. Conversely, approximately 20 % of consumers state that they “not at all” or “not oſten” read unaddressed adversing material. A lile more than 25 % of all Danish households are not receiving unaddressed adversing material in the mail box. If more consumers choose to read unaddressed adversing material on the Internet or on smartphones instead of receiving them in their post box, it will contribute to reduce the costs of communicang discounts and adversing campaigns without weakening compeon. See full text of the Report (in Danish) and Summary (in English)
