Price hikes “not result of higher retail profit margins”

Many have speculated that the rapidly rising consumer prices are the result of higher profit margins for retailers.

But there is no evidence that this is the case, according to the House of Industry, which argues that Faroese retailers are finding it difficult to absorb the rapidly rising costs from their suppliers.

Since inflation rates started rising, profitability and earnings before interest, taxes, depreciation, and amortisation (EBITDA) went down from 2021 to 2022.

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According to the House of Industry, this trend is seen across all Faroese businesses, including retailers, although vehicle sales are an exception to this trend.

Figures for 2023 have not yet been released.

Given these findings, the House of Industry questions the arguments for amending anti-competitive laws, which call for improved controls of grocery prices and better tools for keeping inflation in check.

Read the Faroese version of this article here.

More Faroese News in English.