Axfood enjoys strong growth in Q4

Harriet Cohen
Senior Retail Analyst

Date : 10 February 2020

Axfood has said its sales grew 5.4% in Q4 2019, to SEK13.0 bn (US$1.4 bn), with a strong performance across all its banners. It said the pace of growth saw it outstrip that seen in the wider market, which it said stood at 3.7% in Q4 2019, seeing it gain share.

Broad based growth, across all formats

Axfood reported that all its banners had enjoyed good growth in Q4 2019. By banner it said:

  • Willys: total sales rose 6.5%, to SEK7.5 bn (US$780.7m), and by 5.1% in like-for-like terms;
  • Hemköp: total sales increased 5.7%, to SEK3.7 bn (US$385.2), and by 2.5% in like-for-like terms;
  • Axfood Snabbgross: total sales were up by 6.2%, to SEK845m (US$88.0m), and by 6.2% in like-for-like terms as well;
  • Dagab: total sales rose 5.3%, to SEK11.7 bn (US$1.2 bn).

Ecommerce performance aiding performance

At a corporate level, Axfood reported that its group online sales growth hit 31% in Q4 2019, outstripping the market, which stood at 17.2%. Ecommerce was an area it highlighted as underpinning growth at several banners. By banner it said:

  • Willys had enjoyed ‘another strong quarter’, aided by growth in its customer base, higher average ticket and online sales, which it had added to a further 22 stores in 2019;
  • Hemköp was driven by the performance of its franchised operations, which saw sales rise 11.4% in total and by 3.1% in like-for-like terms, versus a contraction in total sales terms for group owned stores. The brand also expanded its ecommerce operations to its franchise operations, which supported its growth;

Looking forward to 2020

The strength of its results saw Axfood commit to sustaining its existing strategy, built around six pillars:

  • Customer offering
  • Customer meeting
  • Expansion
  • Supply chain
  • Work approach
  • Our people

To support these aims it said it planned Capex spending of between SEK900m (US$93.1m) and SEK1.0 bn (US$103.4m). This amount excluded any money spent on acquisitions and was in line with its plan to not invest during 2020 in the ‘automation for the new logistics centre’. Part of the money would be spent on adding between five and 10 new stores.