Sports chains warn of price jump after krone fall – E24

The krone has weakened by 10 percent since the New Year. Then there is nowhere to hide, says the Sport Outlet founder.

The weakening of the krone means that Norwegian companies have to pay more for the same imported goods.

– This is what means that the goods of all the players will become more expensive. When the currency fluctuates so wildly, there is, in a sense, nowhere to hide. That will ultimately affect the prices to the customer, says Sport Outlet manager Tor-André Skeie.

Fast-growing Sport Outlet largely lives by selling cheaper sporting goods that, among other things, come from bankruptcy estates or surplus warehouses that other players are unable to empty.

Skeie says that there are very few products in Norwegian sports shops that originate entirely from Norway.

– In reality, almost everything is affected.

One euro costs NOK 11.58 on Tuesday. A krone as weak as today we last had during the pandemic.

Economists do not rule out an even weaker krone in the short term, but after the summer, Nordea Markets believes in a change.

Not temporarily

Statistics Norway’s consumer price index shows that equipment for sports, camping and outdoor life has risen considerably less in price than many other goods recently.

In March, prices were 2.7 per cent lower than the same month last year.

Gisle Daviknes, manager of the sports chain Stadion, which has over 100 different stores under its umbrella, says that all links in the value chain have so far eaten part of the exchange rate to keep prices down for consumers.

– But it is probably beginning to dawn on most people that this is not temporary. There are already a number of price increases that have materialized, and more are coming. Especially if the devaluation of the krone continues. Then customers must expect price increases, he says.

Ole-Henrik Skirstad, managing director of Intersport and Sport1 owner Sport Holding, will not talk about future prices.

– But we buy a lot of our goods from outside Norway, so with a weakened krone exchange rate, it goes without saying that it can affect the margins.

– Almost happy for a lot of goods

Higher purchase prices as a result of a weaker krone, at the same time, turns another sports industry problem on its head, according to Daviknes.

A number of companies have ended up with too many goods in stock at the end of the pandemic. Since November last year, XXL has been through a period of intense offer activity and a sale of inventory worth NOK 1.1 billion.

They have not been alone in this.

– I think all sections have had too many goods in stock for a period of time. It is a natural consequence of the fluctuations in the market, says the Stadium manager.

The sports industry was one of the big pandemic winners, although the stores occasionally struggled with problems in global supply chains. And when the plug finally loosened, a completely different economic picture followed – with higher interest rates and weakened purchasing power among consumers.

– For our part, it has not been dramatic. We have somewhat more goods than at this time last year, and somewhat more than we would like. But some goods we are almost happy to sit with too much of, because we know that the prices will increase so much in the future.