ICA reported Q4 and full year consolidated sales, saying total sales rose 2.6% in its final quarter, to SEK30.9 bn (US$3.2 bn), and by 3.4% in the year, to SEK119.3 bn (US$12.4 bn), as a whole. In the fourth quarter ICA said ‘sales growth was mainly price-driven, but included favourable volume growth in ICA Sweden's wholesale operation, ICA Bank and Apotek Hjärtat’.
ICA developed in line with the market in Sweden in 2019
ICA said the Swedish market, according to the Food Retail Index (DVI), advance by 3.7% in Q4 and by 3.1% for the full year. As such, it grew in line with the wider market. During the fourth quarter ICA said food price inflation reached 3.1%, leaving volume growth at approximately 0.6% in total and approximately 0.4% on a like-for-like basis. ICA said in its home market, growth had been driven ‘mainly by a higher average spend owing to higher average prices, while the number of items purchased per customer visit decreased slightly’.
Its performance, both in the FY and Q4, was driven by continued strength at its Maxi ICA Stormarknad format. ICA noted while ‘the number of customer visits increased in all store formats [it was] most of all for Maxi stores’. Helping it to differentiate itself in the market and support footfall at its stores, ICA said the share of sales accounted for by private labels rose to 25.8% in 2019.
Rimi Baltic faces up to challenging conditions
At an operating level, ICA said Rimi Baltic’s net sales increased by 2.0%, to SEK4.3 bn (US$448.6m), in the fourth quarter, while they rose by 2.7% for the full year, to SEK16.2 bn (US$1.7 bn). ICA said in the fourth quarter sales across its operations ‘continued to be price-driven with weak underlying volume growth’.
At a country level, Estonia saw the strongest growth in total sales, while on a like-for-like level it was Lithuania, for both the fourth quarter and full year. ICA highlighted how it had completed the conversion of Supernetto stores to the Rimi brand in the second half of 2019. However, it noted the conversions had negatively affected its performance. Across the three countries, food price inflation hit 2.7%, with underlying volume growth reaching 1.6% during the year. ICA also said it had started an ecommerce business in Latvia.
Apotek Hjärtat enjoys good growth in 2019
At Apotek Hjärtat ICA said net sales rose 4.7% both in its fourth quarter, to SEK3.8 bn (US$396.4m), and its full year, to SEK14.8 bn (US$1.5 bn). In Q4 it said the sales growth had been ‘driven by positive mix effects, growth in ecommerce and new pharmacies’. Ecommerce sales, including click and collect, increased by 37% in Q4 and by 40% for the full year, while two pharmacies were opened during the quarter too.
Results set foundations for 2020
Looking forward to the year ahead, ICA said its performance enabled it to enter 2020 with confidence. In the next 12 months it said it would focus on:
- ICA Sweden: continue to expand its ecommerce coverage, invest further in the digitalisation of its operations and build on the launch of its Stammis loyalty programme;
- Rimi Baltic: focus on how to ‘fend off Lidl in Latvia and Estonia’, ;
- Apotek Hjärtat: six to eight new openings are planned, most at locations near ICA stores;
Following Capex of SEK3.1 bn (US$323.4m) in 2019, which was down on the SEK3.5 bn (US$365.1m) invested in 2018, ICA said it was expecting to spend SEK4.0 bn (US$417.3m) after a number of projects envisioned for 2019 were pushed back to the following year. ICA said the money would be spent on acquiring sites for new stores, new stores and conversions of existing sites, investing in its group ecommerce capabilities and a new warehouse in Riga.