Four ways Axfood is driving online growth

Harriet Cohen
Senior Retail Analyst

Date : 04 June 2020

With the Coronavirus (COVID-19) pandemic linked to a marked shift towards online grocery, Sweden’s Axfood has made a series of timely investments in this fast-growing channel.

1. Partnership with Circle K in click and collect push

Axfood’s discount banner Willys has introduced click and collect lockers at Circle K forecourts. Initially this will include four stores in the Frescati, Bandhagen, Märsta and Tumba areas of Stockholm.

Source: Axfood

The move follows research that ‘almost one in ten Swedes stating that they will continue to buy more food via the Internet in the future’.

Commenting on the development, Willys CEO Thomas Evertsson said, ‘We want to test new ways to enable more people to e-shop food. While picking up your groceries, you can take the opportunity to refuel, wash the car or buy something good to eat’.

Willys already offers automated click & collect in several stores, which IGD has seen on official store visits.

Source: IGD Research

2. Axfood’s ‘Mat.se and Apohem test joint delivery of food and pharmacy products’

In other news, Mat.se and Apohem are trialling combined deliveries of food and pharmacy products in the Stockholm area. This will allow Mat.se’s online grocery customers to add Apohem pharmacy products to their orders.

Ludvig Anderberg, operations manager at Mat.se said, ‘For us at Mat.se it is important to be at the forefront regarding the development of e-commerce, and we are happy to test new and innovative solutions. Co-delivering and making our customers' everyday lives easier is important to us’.

‘In addition, the Apohem package can go with an existing delivery, which is good for the environment'. Gustav Hasselgren, CEO of Apohem added.

3. Apohem moves to new e-commerce site driving synergies with wider Axfood business

In related news, Apohem is moving to a new e-commerce site in Årsta, ‘one of Stockholm's most central e-commerce’ locations making it a neighbour of Mat.se’s, Willys and Hemköp’s own e-commerce facilities.

Commenting on the development, Frida Ridderstolpe, e-commerce manager at Axfood said, ‘In order to best meet customer needs, it is important that we find synergies and new collaborations within the Axfood Group. This applies not least to the development of e-commerce, which is growing strongly in both the food and pharmacy segments’.

4. Urban Deli launches online grocery with next day delivery

In other news, the Axfood-operated Urban Deli business ha introduced a new online grocery service that offers next day delivery.

Source: IGD Research

Sibel Wolff, Marketing and Communications Manager said, ‘We know that many people have a hard time coming to us to shop and therefore the web shop becomes important in order to maintain a high level of service... In the new online store, we focus on user-friendliness and inspiration’.

Key features include:

  • Next day home delivery where orders are placed before 8pm
  • Free delivery on orders over SEK 1,000 ($107)
  • Click and collect at any Urban Deli store
  • A range of meal for tonight inspiration
  • Select fresh and ambient groceries
  • Fish, meat and seafood, which are sent directly from suppliers to customers. Manager Henrik Sjöblom, said ‘We don't have to sit in a large warehouse and the risk of fine raw materials getting old. Together, we help reduce food waste and increase sustainability’.

So what do we think?

IGD research shows that online grocery remains at an elevated penetration, relative to pre-crisis levels. Retail Analysis subscribers can read more about this in our exclusive insight presentation, 'Post-coronavirus (COVID-19): how it will impact online in 2020'.

In Sweden, Axfood’s own research found that ‘9% of customers say they will continue to buy food online more in the future’. Elsewhere in the market, ICA CEO Per Strömberg said that in Q1 2020 the retailer's ‘online sales as a share of total sales were very high and at levels that we had not expected to see for a couple of years'.

Axfood’s recent innovations demonstrates its agile approach to addressing the shift towards online grocery shopping, while tapping into health, convenience and urbanisation trends. While some developments may have been in the pipeline before the Coronavirus (COVID-19) pandemic, recent events are likely to have accelerated change. The channel is set to become even more competitive, with ICA switching to Ocado’s online grocery platform in 2021.