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ECONOMY

Danish consumers still spending but stores expect more price hikes

Already-high prices in Danish stores are expected to increase further, according to companies in the consumer sector.

Danish consumers still spending but stores expect more price hikes
People are still spending on consumer goods in Denmark despite higher prices. File photo: Maria Albrechtsen Mortensen/Ritzau Scanpix

Analysis by national agency Statistics Denmark found that up to 60 percent of stores in the consumer sector – which encompasses everyday goods – are likely to increase prices during the next three months.

The agency regularly looks at trends in the consumer sector and asks companies about recent and expected price changes.

A larger proportion of stores than usual said it had increased prices in recent months, the agency found.

A majority also said that they expect to raise prices in future, even if they have already increased prices recently.

The proportion of companies that said they had recently increased priced was 64 percent in May, more than the 56 percent registered by Statistics Denmark in April.

The proportion of stores that said it was likely to increase prices was around 60 percent in both April and May.

Denmark has seen a general increase in the prices of consumer goods in recent months, closely related to high energy costs.

But data for sales in the consumer sector in April shows that consumer activity has remained stable so far despite the higher prices.

Interest organisation the Danish Chamber of Commerce noted the apparent calm amongst consumers in Denmark.

“It looks as though Danes are spending a largely unchanged number of kroner in the consumer sector but that they are getting fewer products in their baskets as a result of the very high inflation,” the organisation’s senior economist Tore Stramer said in a written analysis.

Spending on consumer goods was almost the same between February and April, according to news wire Ritzau.

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ECONOMY

Denmark’s economy grows but public still feels the pinch

An early indicator suggests that Denmark’s economy grew in the second quarter of this year after a downward turn in the first three months of 2022.

Denmark’s economy grows but public still feels the pinch

A GDP indicator from national agency Statistics Denmark suggest the economy grew in Q2 of 2022.

After decreasing 0.5 percent in the first quarter of the year, the initial indicator for the second quarter gives a 0.7 percent growth according to the agency.

A decrease in GDP in two consecutive quarters fulfils the technical definition of a recession. This has therefore been averted by the Danish economy in the first half of 2022.

Analysts commented that the second-quarter was larger than had been predicted.

“The growth comes after a first quarter in which things went in the opposite direction, so in the bigger picture it’s more standing still than high growth that is characterising the Danish economy,” Danske Bank senior economist Las Olsen told news wire Ritzau.

Despite the positive development, Danish businesses and the economy in general are still facing challenges on a number of fronts, he also said.

“This must be seen in light of the massive problems many businesses have with acquiring materials and labour, even though it appears that employment is actually still increasing,” he said.

“Businesses could well have sold more, but it’s difficult for them to make [products],” he said.

READ ALSO: Danish businesses repeat call for foreign workers amid labour shortage

Although the economy has grown statistically, many will not have felt this materially, the analyst said. This is because prices have continued to increase and inflation remains high, meaning consumers are still getting less for their money.

Retail activity has fallen because of the high prices, senior economist with Arbejdernes Landsbank, Jeppe Juul Borre, noted with regard to the Statistics Denmark figures.

“Danes are currently experiencing the steepest increases in consumer prices for almost 40 years. That takes purchasing power away from consumers and squeezes private spending,” he wrote in a comment.

“Private spending comprises almost half of the Danish economy and therefore plays a huge role for the economy,” he said.

The hotel and restaurant industries are primarily responsible for the second-quarter growth, according to Statistics Denmark.

The GDP figure is an early indicator, meaning it can be revised once more data is available.

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