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Norway Doesn't Attract Fast Food Chains. This Deters Major Brands
Low brand awareness means higher marketing costs. Fot. Fotolia (zdjęcie poglądowe)
Taco Bell has just opened its restaurant in Stockholm, joining brands like KFC that have been present for years just across Norway’s eastern border. Similar chains are still absent above the fjords. Available data shows that companies’ decisions are driven by market and cost conditions, not by formal bans.
One of the key factors is Norwegian tariffs and raw material prices. The Ministry of Agriculture and Food points out that meat and dairy products are subject to higher customs duties than in many other countries.
Importing ingredients comes with high costs, and local products are also expensive. For international chains, this means increased operating costs. As a result, profit margins may be lower than in larger markets such as the USA.
Importing ingredients comes with high costs, and local products are also expensive. For international chains, this means increased operating costs. As a result, profit margins may be lower than in larger markets such as the USA.
Small Market and Franchise Model
Market size and structure also matter. Norway is a country with dispersed settlements and few locations where restaurants can be profitable. Franchise chains usually plan to enter a market by opening many outlets at once.
In Norway, the possibilities for such expansion are smaller. Additionally, it is harder to find franchisees willing to invest and take on financial risk.
In Norway, the possibilities for such expansion are smaller. Additionally, it is harder to find franchisees willing to invest and take on financial risk.
Non-EU status makes importing food products more difficultPhoto: fotolia.pl/royalty free
Low Brand Recognition
Brand recognition also affects the situation. According to industry representatives, many American chains are not well known to Norwegian consumers. This forces high spending on marketing and brand building.
In other European countries, these brands are already present and better recognized. For this reason, Sweden is often chosen as a more predictable launch market.
In other European countries, these brands are already present and better recognized. For this reason, Sweden is often chosen as a more predictable launch market.
Norwegian Law Doesn’t Block American Chains
State institutions emphasize that Norway does not apply special regulations targeting fast food chains. The same rules regarding food safety, labor market, and environmental protection apply as for other food service businesses.
The lack of new American brands is therefore not due to administrative barriers. The main factors are costs, market scale, and business conditions.
The lack of new American brands is therefore not due to administrative barriers. The main factors are costs, market scale, and business conditions.
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