By: Rosa Ingemarsson & Caelan Monkman
As much of the world deals with inflation and increasing food prices, some Danish citizens have been forced to adapt their spending habits
According to Statistics Denmark’s Consumer Price Index annual rate of change, the overall cost of consumer goods in Denmark increased by 7.7 per cent in 2022, significantly higher than the past decade’s average annual increase of just over 0.9 per cent. In December 2022 an average package of butter was almost 45 per cent higher in price than in the same month the previous year.
Despite this, Denmark remains a largely food-secure country. In 2022, Denmark ranked 14th out of 113 countries on Economist Impact’s annual Global Food Security Index. When looking at food affordability, Denmark ranked sixth.
This relative food security despite widespread price increases means that most Danish consumers have mostly been able to adapt by changing their spending habits.
Nicolai Enøe Holm, 22, is standing outside one of Aarhus’ budget grocery stores. Holm, an engineering student, has just bought some groceries and mentions the changes in his shopping habits.
“I tend to get cheaper products now. The higher prices affect my income and definitely my budget. So I think maybe the quality of the food I buy is affected. I buy more of the generic everyday food now,” he says.
This shift in consumer spending has also been noticed by experts.
“The sales of quality varieties of products have decreased more than the more generic ones. For example, the sales of organic products have dropped quite a lot,” said University of Copenhagen professor Jørgen Dejgård Jensen.
Jensen is a professor at the university’s Department of Food and Resource Economics. His primary field of research explores consumer behaviour and the economics of food consumption and production.
While the ongoing war in Ukraine is widely understood to be behind the increase in consumer goods, Jensen says that there are also other factors at play.
Jensen explained that a 2021 outbreak of African swine fever in China resulted in a massive blow to the global pork industry. As China’s livestock industry began recovering, their need for grain — of which Russia and Ukraine are two of the world’s largest exporters — increased dramatically.
“So that has also led to a strong increase in the prices of grains and oilseeds, which actually came before the invasion of Ukraine, I think that’s not so well known to everybody,” said Jensen.
Provided the Russia-Ukraine conflict doesn’t escalate further, Jensen predicts that food prices could begin to stabilize within the next year. What’s less certain is whether this stabilization will result in lower grocery costs for Danish consumers.
“There’s some research indicating that these sorts of levels of the supply chain are more flexible in adjusting the prices when it goes upwards than when it goes downwards.”
Jensen continues,
“So [retailers] might be more reluctant to reduce the prices again, even if the world market prices decrease.”
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