Though most people already know that prices at Swiss shops and supermarkets are a lot higher than they are in other European countries, a new study has revealed that huge differences also exist on the internet. The French-Swiss consumer organisation FRC found that international brands charge customers more for practically everything, despite not having a physical presence in Switzerland.
To create the study, the FRC examined the prices of 100 items sold online by 20 international companies. The products, which were randomly selected, had to be available to buy online in Switzerland, Germany and France. The price in each of the three countries was then calculated, and the value-added tax (8,1 percent in Switzerland, 20 percent in France and 19 percent in Germany) was removed.
In the report, the FRC accused international clothing, outdoor, household, furniture and electronics brands of charging a “Swiss supplement”. This is where companies deliberately charge people in Switzerland more for no reason other than they can.
The biggest price differences were reported among large clothing brands, namely Zara and H&M. H&M’s Swiss prices were around 93 percent higher than in France and 70 percent higher than in Germany, while Zara charged Swiss customers up to 77 percent more.
While the report cited “high commercial rents” as a possible reason for the price hikes, “such variations remain difficult to justify”. Global brands with a more limited physical presence in Swiss cities and cantons, like Birkenstock and Zalando, were 37 and 35 percent more expensive in Switzerland respectively. Outdoor and sports brands like Puma and Adidas were also cheaper to buy online in France and Germany.
The FRC noted that while household appliances are roughly the same price to buy in both Germany and France, they are between 6 and 55 percent more expensive in Switzerland. Similar price differences were reported for TVs, furniture and video games.
Though most people living in Switzerland know how expensive the country can be, the counterpoint to the "Swiss cost of living" is equally well known. Though prices are high, salaries can compensate, and as wages are high, retailers must charge more to compensate.
However, the FRC argued that this cannot be true for online international retailers, which often have a limited presence in Switzerland, if at all, and therefore no personnel costs. Even if the item is made somewhere in Switzerland, the report calculated that production costs would only justify an 11 percent price hike compared to France and Germany.
Therefore, the report argued that online companies deliberately charge higher prices because they know they can get away with it. Quoting from a recent Federal Council report, the FRC noted that “higher prices are less an expression of a high wage level than the result of the strong purchasing power of the Swiss that producers and distributors know how to exploit."
Speaking in the report, official Swiss Price Monitor Stefan Meierhans said that while there are valid reasons for higher prices, unfair living costs are now part of the fabric of life in Switzerland. “As long as we accept higher prices, companies have no incentive to adapt their strategy,” he concluded.