”The More the Merrier?”

Abstract: Competition on the Swedish grocery retail market has increased profoundly, mainly as a result of foreign retailers entering the market. To keep up with this intensified competition, Swedish retailers need to lower their costs. In May 2004 ten new countries will become members of the EU. The majority of these countries are known for being labor-intensive states and in addition it is inexpensive for foreign companies to invest there. Furthermore, as these countries become members of the European Union, several trade barriers will disappear and it will be a lot less costly and time consuming for foreign companies to move their production to these regions or to use subcontractors in these countries. Also, as they become members of the EU, Sweden and these countries will no longer have diverging food laws and consequently a number of impediments will be eliminated. This also constitutes and incentive for Swedish retailers to import products from these countries.