Food and energy prices rocket as Danish inflation hits 40-year high

Prices for consumers have increased in Denmark by 6.7 percent across the last 12 months.

Danish supermarket prices
Danish supermarket prices have jumped in the last 12 months. File photo: Signe Goldmann/Ritzau Scanpix

The costs paid by consumers in Denmark last month were 6.7 percent higher than prices in April 2021, according to new data released by national agency Statistics Denmark on Tuesday.

The 6.7 percent increase is the largest jump in prices since 1984.

Electricity, fuel, gas and food are the goods categories pulling that figure upwards the most, meaning the prices of these are likely to have increased even more than the average.

Spiralling prices are now beginning to have a real effect on household finances, an analyst said.

“Ouch, this is really hurting the wallets of Danes. We are talking about the biggest price rises since 1984,” senior economist with Arbejdernes Landsbank, Jeppe Juul Borre, told news wire Ritzau in a written comment.

“Calculated in kroner, a family with children must now spend around 30,000 kroner more to maintain the same annual consumption as a year ago. That is a seriously big chunk into a family’s household budget,” he said.

“Inflation is no longer something primarily only talked about, but something Danes actually feel when grocery shopping,” he said.

Sub-groups of products are more affected by inflation than others, meaning the price increases will not have an even impact, according to Danske Bank consumer economist Louise Aggerstrøm Hansen.

Food has increased in price by 7.7 percent when comparing April 2021 to last month.

There are also signs of prices beginning to increase in other products and services categories.

Although external factors such as the Russian invasion of Ukraine and high energy costs are a large part of the explanation for inflation in Denmark, there are also signs of a broader trend, Hansen told Ritzau.

“If we peel off energy, unprocessed foods and taxes to measure the level in the economy of prices not directly imported by global conditions or tax increases, we land on 3.6 percent,” she said.

“That is very high and now beats the record from 2008, just before the economy collapsed following a massive overheating,” she stated in an analysis.

Despite the apparently concerning situation, Danske Bank says it expects inflation to have peaked in April.

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Danish supermarket chains introduce price limits on selected products

Danish company Salling, which owns three supermarket chains, will place a limit on the price of selected products until later this year in response to inflation.

Danish supermarket chains introduce price limits on selected products

The high current prices of energy and many daily items for customers, caused by inflation, are behind Salling’s decision to introduce a price limit on some of its products, the company said in a statement on Tuesday.

Salling owns the Netto, Bilka and Føtex supermarket chains in Denmark. The prize freezes will apply at all three.

The limits, which will be in place until October, will be applied to “basic daily and food items”, according to Salling. Netto stores will see price limits applied to 100 products, while the larger Føtex and Bilka stores will have 200 products included.

Own-brand Salling products are likely to form the bulk of the lists, but the specific products were not named by the company.

The prices of the selected products “will not increase before October 28th despite ongoing, increasing inflation,” Salling said.

Although Salling expects inflation to continue, it said it wanted to give customers the option of preventing their spending on groceries from increasing by enabling them to choose products that have not gone up in price.

“We will make it easy for customers to navigate the products by communicationg prices clearly in our stores using signs and markings on shelves,” Salling CEO Per Bank said in the statement.

The move was described by Salling in the statement as an “investment” in light of expected higher costs at suppliers.

“It is just a year since Danes bought luxury items and flocked to supermarkets as a result of corona lockdowns and with extra holiday money in their pockets. Today, customers navigate by special offers and own brands as an alternative to name brands in Salling’s shops and stores,” the company said.

The company will announce on November 1st whether it will extend the limitation period, it said.