ICA Q1: strong results in Sweden and Lithuania

Date : 03 May 2019

ICA released its first quarter results, reporting consolidated net sales increase of 2.8% to SEK28,098m (€2.7bn) and net profit of SEK813m (€77.4m). Sweden and Lithuania continue to be the markets where the group experiences the strongest growth.

Sweden: net sales +2.2%, driven by prices at retail and volumes at wholesale

In its home market, ICA reported consolidated sales of SEK19,793m (€1.9bn). ICA attributes the growth to “price effects but higher wholesale volumes, with a higher share of purchasing by ICA stores, which made a positive contribution”. Easter happening in Q2 had an estimated negative effect of 1.7% on volumes.  

The operating profit excluding items affecting comparability increased by SEK68m (€6.5m) to SEK825m (€78.6) and the operating margin rose by 0.3pts to 4.2%.

Hypermarkets continue to grow faster

Following a strong H2 2018, ICA Maxi hypermarkets continue to experience the strongest growth. Their sales increased by 1.5% to SEK8,661m (€824m) and remain the group’s biggest format.

All formats posted sales increase, with ICA explaining growth was “driven mainly by a larger number of customer visits, while the average spend was down slightly, mainly owing to a lower number of items per customer associated with the calendar effect of Easter weekend”.

One Nara store opened and three closed during the period. ICA revised down its opening plans for 2019 to eight to 10 stores, from 12 to 14 previously.

Strong performance for food and private labels

General grocery and most food categories continue to perform well, including, “fruits & vegetables, frozen products, bakery, salads and prepared foods”. Private label’s share grew by 0.8pts, compared to Q1 2018, to reach 26.8%.

E commerce +34%, grows ahead of the market

E commerce grew by 34% (above market at +19%) to SEK570m (€54.3m) compared with the same period in 2018 with 41% growth in food. ICA continues to invest in digital solutions with a new fast delivery service of meal solutions from shoppers’ local store. It is currently tested in pilot stores and let shoppers choose between delivery or pick-up in store.

Rimi Baltic: net sales +1.8% to €362m, driven by Lithuania.

Net sales increased by 1.8% to €362m during the period, mainly driven by price. Lithuania, where net sales increased by 2.9%, grew above the rest of the market at 2.4%. But the situation was different in Estonia (+1.2%) and Latvia (+1.1%), both growing behind their markets, respectively at 4.6% and 4.3%. In Latvia, net sales are affected by the conversion of the Supernetto stores as part of the one brand strategy, 29 stores out of 44 have been completed.

In 2019, ICA plans to open eight to 10 stores in the Baltics and test e commerce.

Want to keep up with the latest developments at ICA and other international retailers? Sign up for our free Retail Analysis international newsletter.