RetailAnalysis
08 February 2017
Sweden: 2016 results in focus

As Sweden's retailers begin to report their 2016 results, we review results from ICA and Axfood. Although both retailers have reported growth, Axfood is growing the fastest, with consolidated net sales increasing by 5.1% to SEK 43,355m (€4.6bn).

ICA Sweden: +2.0% driven by fresh food

ICA Sweden reported 2016 net sales growth of 2.0% to SEK 74,050m (€7.8bn) and a 4.1% increase in operating profit to 3,604m (€369.5m). Sales growth was driven by higher average basket spend, particularly in fresh categories including bakery, flowers, vegetables and prepared food. Net sales growth was not as strong in the final quarter of the year, at 1.1% up versus the previous year.

All formats reported growth, with the strongest growth in convenience (2.7%), despite ICA having 13 net fewer convenience stores in 2016 versus 2015.

Highlights: online, private label & new openings

  • 204 ICA stores offer an online service, while a number of stores offer ICA’s pre-packed grocery bags.
  • Online grocery sales increased by 47% in the fourth quarter of 2016, compared with last year.
  • Private label share of sales increased by 0.7% to reach 24% of sales.
  • 17 new stores opened during the year, nine of these in the fourth quarter.

2017 priorities

  • Enhancing the ready-meal offer
  • Promoting organic and local sourcing
  • Driving value perceptions
  • Developing private label ranges
  • Offering personalised offers to loyal shoppers
  • Continuing to develop ecommerce
  • Opening ten to fifteen new stores

Elsewhere in Sweden…

Competitor Axfood reported that its consolidated net sales increased by 5.1% to SEK 43,355m (€4.6bn), as like for like-sales for Group-owned stores increased by 2.0%. Net profit increased by 8.2% to SEK 1,473m (€155.3m).

All formats reported growth, with the strongest performance in Axfood Närlivs (wholesale) and Hemköp (supermarkets) which increased by 5.5% and 4.9% respectively. Private label sales also increased by 0.9% to 27.9%.

Online geographic reach to extend at pace

As of the end of 2016, Axfood offered ecommerce to over two million shoppers in four cities through the Willys and Hemköp formats. In 2017, Axfood plans to extend Willys ‘to offer ecommerce in an additional 20 cities and Hemköp in another ten’.

ICA's Rimi Baltic sees strong 2016, challenging Q4 in Lithuania…

In 2016, sales at ICA's Rimi Baltic fascia increased by 7.4%% to SEK 13,571m (€1.4bn), while operating profit increased by 26% to SEK 526m (€55.5m). All countries reported growth, with the strongest performance in Lithuania which grew at 8.9% to €313m. However, during the fourth quarter, performance in Lithuania dropped, with net sales growth of 0.7%, while like-for-like sales turned negative at -3.4% versus 2015.

…As ICA acquires Lithuania’s #2 retailer IKI

Rimi Baltic in Lithuania is likely to have been impacted by Lidl, which recently entered the market. Despite this, in December 2016, ICA reached an agreement to acquire Lithuania’s second largest grocery retailer, which operates around 280 stores. Read more about the implications of this here.

Wondering how retailers could compete with discounters?

Find out in our insight presentation here.

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