Denmark: Salling Group & Coop Danmark 2019 results

Date : 06 May 2020

Harriet Cohen

Senior Retail Analyst

We share the latest news from Denmark as the country’s leading retailers report their 2019 results.

Salling Group 2019 revenue: +1.5% to DKK56.7bn (USD $8.57 bn)

Salling Group has recorded ‘the second-best results in the company’s history’, with revenue increasing by 1.5% to DKK56.7 bn (USD $8.57 bn).

Profit ‘including income from the sale of Netto Sweden’ reached DKK2.4bn (USD $363m). Excluding the sale, profit rose by 2.8% to DKK1.5bn (USD $227m)

2019 highlights: profit, Netto 3.0 investment and sale of Netto Sweden

  • Profit increase: strong growth in Netto discount and føtex chains contributed to wider profit growth
  • Netto 3.0 investment: DKK1bn (USD $151m) in upgrading stores in Denmark, Germany and Poland. For more insight on the Netto strategy, IGD Retail Analysis subscribers can access our exclusive store visit presentation, ‘Netto’s discount store of the future’
  • Netto Sweden sale: 163 stores sold to Coop Sverige

CEO: ‘progress was driven by our core business both in Denmark and abroad’

Commenting on the results, CEO Per Bank, said, ‘This is a strong year in which progress was driven by our core business both in Denmark and abroad. Netto Denmark delivered its best year in the history of the chain and, like føtex, achieved its highest ever earnings. At the same time, Netto Poland and Salling Department Stores also delivered revenue records’.

CEO outlook: investing in lower prices, shopping experiences and community…

Regarding the future, he added: ‘With this development in mind, we can continue to invest in lower prices and better shopping experiences for customers across our chains, as well as enabling us, together with suppliers and partners, to take even more responsibility for the communities we are a part of’.

…Despite Coronavirus (COVID-19) uncertainty

Due to the impact of COVID-19 in 2020, the long-term effects of consumer confidence, willingness to buy and price levels may affect results.

CEO Per Bank added: ‘We will do everything we can to help our customers through the coming time. None of us have been in a similar situation before, and I would like to thank the authorities for exemplary cooperation so far and the customers for showing consideration and patience. At the same time, I am extremely proud of all my colleagues in the Salling Group, who have made a huge effort’.

Coop Danmark: revenue declined by 1.15% to to DKK42.7 bn (USD $6.5 bn)

Coop Danmark’s 2019 results saw revenue decrease by 1.15% to DKK42.7 bn (USD $6.5 bn).

Kvickly and Fakta achieve profitability for first time in several years

Despite the decline, the Kvickly hypermarket and Fakta discount chains achieved profitability for the first time in several years. Results at Irma were less positive, as newly competitors opened in close proximity, while there were delays and additional costs in remodelling stores.

Chairman of the Board: ‘We achieved a significantly better operation in the stores’

Chairman of the Board, Lasse Bolander, said: ‘Coop was significantly stronger at the end of 2019 than when the year began. We achieved a significantly better operation in the stores, among other things. thanks to strong local grocery and extensive digitization of the company, which has been well received by customers’.

2019 highlights: new technology, updating store concepts and online

  • Investing over DKK1bn (USD $151m) in digitization and IT annually: The retailer called out the Coop One IT platform, as well as the usage of the Coop app and Scan & Pay technology
  • Updating store concepts: Coop introduced new store concepts for Fakta and SuperBrugsen, also adding self-checkouts
  • Online: The online platform has expanded its range

Further priorities: sustainability, online and quality

Coop Danmark’s annual report outlined its focus on sustainability, the online shopping experience and offering higher-quality products. It will also prioritise continued digital investment, driving energy efficiency and store modernisation.

2020 result uncertain due to Coronavirus (COVID-19)…

Like Salling Group, Coop Danmark advised that it will be challenging to predict its 2020 financial results due to COVID-19. The virus has changed shopping habits including fewer purchases with larger quantities and a significant increase in online shopping.

Speaking on the matter, CEO Peter Høgsted said, ‘Overall, this first phase has seen a slight increase with large differences between product and store types. But we are looking into a future where we can expect consumers to be more cautious. So we will be satisfied if we achieve a result at the same level as 2019, even though we anticipated progress before the Corona crisis’.

…While strategy focusing on responsible, local, organic and digitalisation continues

Although the virus creates an unpredictable future, Høgsted added, ‘That does not change the fact that we continue our strategy, which is focused on providing customers with increasingly responsible grocery shopping, better food in the form of more local and organic goods, and work on digitalisation to make everyday life easier for our members and customers’.