Cheapflation Crisis: Why Basic Groceries Are Getting Expensive—and What It Means for Your Wallet
The Rising Cost of Living: When Even the Cheapest Groceries Become a Luxury
Imagine walking into your local grocery store, reaching for the familiar package of First Price fiskeboller—a staple for many households struggling to make ends meet—and discovering the price has nearly doubled in just three years. That’s not a hypothetical scenario. it’s the harsh reality facing millions of consumers across Norway and beyond. According to a recent Statistics Norway (SSB) report, prices on budget-friendly grocery items have surged by 29.3% from 2021 to 2024—far outpacing the general inflation rate of 23.4% for all food products.
This phenomenon, dubbed “cheapflation” by economists, describes a troubling trend where basic, affordable goods become disproportionately expensive, disproportionately affecting low-income households. For families already stretched thin, these price hikes aren’t just inconvenient—they’re devastating. As Mímir Kristjánsson, a politician from the Norwegian Red Party (Rødt), puts it: “This isn’t just inflation—it’s a way to squeeze the poor even harder.”
Staggering Price Jumps on Everyday Staples
| Product | 2022 Price (NOK) | 2025 Price (NOK) | Price Increase (%) |
|---|---|---|---|
| First Price Fiskeboller | 17.90 | 35.40 | +97.7% |
| First Price Lapskaus | 20.60 | 38.90 | +88% |
| First Price Strawberry Jam | 24.90 | 35.83 | +43.9% |
Source: Gudbrandsdølen Dagningen and Enhver.no price comparisons (2022–2025).
The term “cheapflation” was coined to describe this specific type of inflation, where budget products rise in price faster than premium alternatives. Unlike traditional inflation, which affects all goods equally, cheapflation exacerbates inequality by making essentials unaffordable for those who can least afford it.
Why Are Budget Groceries Getting So Expensive?
Experts point to a mix of factors driving this crisis, but the debate is far from settled. Proponents of stricter market regulations, like Kristjánsson, argue that market consolidation is to blame. In Norway, just three major retailers—NorgesGruppen, Rema 1000, and Coop—dominate over 90% of the grocery market. With so little competition, critics say, these giants have little incentive to keep prices low.
Stein Rømmerud, communications director at NorgesGruppen, counters that rising costs for raw materials, energy, and transportation are the primary drivers. “When the price of fish, sugar, or packaging skyrockets,” he explains, “the impact is felt most acutely in budget products because they have thinner profit margins to begin with.”
While considerable retailers blame supply chain issues, some economists warn that profit margins on private-label brands (like First Price) have also expanded. A 2023 study by SSB found that these brands often have higher profit margins than national brands, suggesting retailers may be price-gouging budget-conscious shoppers.
Case Study: New Zealand’s Grocery Market Reform
Across the Tasman Sea, New Zealand took bold steps to combat similar issues by opening its wholesale grocery market to more competitors. The result? Lower prices for consumers and increased competition. Kristjánsson cites this as a model for Norway, arguing that breaking up monopolies could be the key to reversing cheapflation.
Who Gets Hurt the Most?
The data paints a grim picture. Households already relying on the cheapest groceries—such as single parents, retirees on minimum pensions, and low-wage workers—have few alternatives. Unlike wealthier consumers who can switch to organic or premium brands, these families are locked into budget options with no escape.
- 29.3% – Price increase for budget groceries (2021–2024)
- 19.2% – Price increase for other food items (same period)
- 6% – Average monthly inflation rate for groceries in 2025 (SSB)
- 90% – Market share controlled by the top three retailers
Kristjánsson warns that this isn’t just an economic issue—it’s a social justice crisis. “When the cost of basic food doubles, it’s not just about empty wallets,” he says. “It’s about hunger, stress, and desperation.” The rise of food queues and charity distributions in Norway—once rare—now reflects the growing struggle of families to afford even the most basic meals.
“I’m on a tight budget. How can I stretch my grocery money further?”
Answer: While retailers argue they have no control over raw material costs, some strategies can help:
- Buy in bulk (when possible) to reduce per-unit costs.
- Compare prices across stores—some budget chains may offer better deals.
- Use loyalty programs or digital coupons for discounts.
- Opt for frozen or seasonal produce, which are often cheaper.
However, with cheapflation, even these tactics may offer limited relief.
Can Cheapflation Be Stopped? Exploring Solutions
1. Breaking Up the Grocery Monopolies
Kristjánsson advocates for mandatory market splitting, particularly targeting NorgesGruppen’s Kiwi chain. “If Kiwi were separated into an independent competitor,” he argues, “we’d have at least four major players instead of three, forcing prices down through competition.”
2. Transparency and Price Regulation
Israel has implemented mandatory price transparency laws, requiring stores to display unit prices clearly. Norway could adopt similar measures to prevent hidden markups on essential goods. capping profit margins on private-label brands could prevent retailers from exploiting budget shoppers.
3. Subsidies for Low-Income Households
Some European countries, like France and Germany, have introduced food vouchers or subsidies for low-income families. While not a long-term fix, these programs can provide immediate relief during crises.
4. Encouraging Smaller Retailers
The rise of local co-ops and farmers’ markets could offer an alternative to corporate giants. In Norway, initiatives like Ekorn (a consumer-owned grocery chain) prove that competition can drive prices down when small businesses thrive.
“The grocery industry isn’t just about supply and demand—it’s about power,” says Dr. Ellen Anita Anderson, an economist specializing in consumer policy. “When a few corporations control the market, they can dictate prices without fear of consequences. The solution isn’t just regulation; it’s rebalancing power back to the consumer.”
FAQ: Cheapflation and Rising Grocery Prices
What is cheapflation?
Cheapflation is a term used to describe when budget or discount-priced goods increase in cost at a faster rate than premium alternatives, disproportionately affecting low-income households.
Why are basic groceries getting so expensive?
Factors include rising raw material costs, reduced competition due to market consolidation, and higher profit margins on private-label brands. Some economists also point to supply chain disruptions and embarrassment strategies by retailers.
Can I still save money on groceries?
While options are limited, strategies like buying in bulk, comparing store prices, and using loyalty programs can help. However, with cheapflation, even these methods may not fully offset steep price hikes.
Is this happening in other countries?
Yes. The UK, Australia, and the US have seen similar trends, though Norway’s high market concentration makes the issue particularly acute. Countries like New Zealand have taken steps to open grocery markets to more competitors, leading to lower prices.
Will prices keep rising?
Without intervention, experts predict continued upward pressure on budget groceries. However, policy changes—such as breaking up monopolies or implementing price caps—could slow or reverse the trend.
Your Turn: How Should We Fight Cheapflation?
This crisis affects millions, but the solutions are within reach. Should governments regulate grocery prices, break up monopolies, or focus on subsidies for low-income families? Share your thoughts in the comments below—or explore more on how you can advocate for fairer grocery prices.
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