Costco, the US-based chain of warehouse stores, opened its first branch in Iceland on May 23. This year.
To call this a big event in Iceland’s consumer landscape is an understatement. One in eight Icelanders had already signed up for membership by the time doors opened in a Reykjavik suburb. Units from the country’s famed search and rescue teams were called in to manage crowd control on opening day.
A Facebook group called Keypt í Costco Ísl.—Myndir og verð (Bought in Costco Iceland— Pictures and prices) has more than 62,000 members, one-fifth the national population of 334,000. There, members compare breathless notes on the prices of big screen TVs, multi-packs of frozen Indian samosas, mixed-nut canisters the size of small dogs, and toilet paper.
It’s not just about the nuts. For many shoppers, the opening of a chain like Costco is a chance to stick it to a really unpopular group in Iceland: other chain stores.
“People are excited about [Costco] because it is a chance to boycott the big chains that control all the prices and show that people will not have it any longer,” one Iceland native now living in California told Quartz.
Prices for food and other consumer goods in Iceland are more than 70% higher than US equivalents. Gasoline prices are among the highest in Europe. Price comparison is something of a national obsession. Neytandinn, an app that lets users compare consumer purchase receipts, is the number one app in Iceland for both Android and iOS, a local news site reported. Users jumped by one-third in the days after Costco opened.
Several factors keep prices high, notably the costs of labor and shipping. But another key reason identified in a 2015 OECD report is lack of competition. Many of the Facebook group’s post are less complimentary of Costco than they are critical of Bónus, Krónan and Nettó, the country’s three main grocery chains.
Costco’s relatively inexpensive gasoline, now the cheapest available in Iceland, has led to criticism of the country’s fuel suppliers, long suspected of collaborating to keep prices high. The new Costco charges 169.9 Icelandic krónur per liter, the equivalent of $6.40 per US gallon. A liter of gas at a typical non-Costco pump is 198.9 krónur, or $7.50 per gallon.
“It’s great to see that we’re getting some real competition on this market,” Runólfur Ólafsson, managing director of Iceland’s auto association told a local news source. Local fuel companies, he said, “owe an explanation to Icelandic consumers.”