Sweden: ICA and Axfood 2018 results

Date : 07 February 2019

ICA has reported that 2018 consolidated net sales increased by 5.4% to SEK 115,354m (€11bn). Operating profit excluding items affecting comparability marginally increased to to SEK 4,651m (€446m). Meanwhile, Axfood reported that consolidated net sales increased by 4.6% to SEK 48,085m (€4.6bn). Net profit increased by 7.5% to SEK 1,577m (€148.9m).

ICA Sweden: net sales +3.9%

ICA Sweden saw net sales increase by 3.9% to SEK 82,411 (€7.9bn). The retailer attributed this to “higher volumes in the wholesale operations and newly opened stores, however, prices also had a positive effect”.

Hypermarkets enjoy strongest growth

While all grocery formats reported growth, the strongest performance came from Maxi ICA Stormarknad hypermarkets, where sales increased by 4.7% to SEK 36,525m (€3.5bn).

ICA closed more stores than it opened during the year and ended 2018 operating 10 fewer stores than the prior year. The only channel growing store numbers was hypermarkets, with ICA three more of these in operation at of the end of the year. Looking ahead, the retailer hopes to open 12 to 14 new stores in 2019.

Fresh and private label continued to perform

Categories which “performed strongly during the period included, among others, beverages, frozen products, salads and prepared foods, bakery, and fruits and vegetables, while meats had weaker performance”

Meanwhile, private label share of sales continued to grow, reaching 25.4% of sales as of the end of the year. 

Online sales: +42% to €165.8m, dark store opened Q4 2018

Online has been a key driver of growth. For the full year, online sales increased by 42% to SEK 1,729m (€165.8m). At the end of 2018, 282 ICA stores offered an online grocery service while 634 stores offered the ICA Matkassen meal kit concept. 

Sales in Q4 grew 35% compared with the same period the year previously. This was driven by the retailer’s online grocery service (+44%), with meal kit sales declining by 2%. Success in the channel encouraged the retailer to open a dark store in Jordbro, south of Stockholm, in October 2018.

Rimi Baltic: +2.1% to €1.5bn, driven by Latvia and Lithuania

At Rimi Baltic, sales increased by 2.1% to €1.5bn, with sales in Lithuania and Latvia increasing by 3.6% and 3.0% respectively. 

Estonia impacted by conversions and closures

However, sales in Estonia declined by 0.9%. This was attributed to “in all essential respects to conversions/closures of Säästumarket discount stores carried out during the preceding year. A corresponding conversion programme for Supernetto stores is now being carried out in Latvia, which has had an estimated negative effect on sales for Rimi Baltic of slightly more than 1%”.

Eight new stores opened in 2018, similar number planned for next year

As of December 2018, Rimi Baltic operated 267 stores, an increase of eight stores versus 2017. Latvia and Estonia accounted for this, with four stores opening in each market during the year. In 2019, Rimi Baltic plans to open a further eight to ten new stores. 

Axfood: Willys powers performance as net sales increase +4.6%

Meanwhile, Axfood reported that consolidated net sales increased by 4.6% to SEK 48,085m (€4.62bn). 

Its discount supermarket banner Willys continued to deliver strong results. Sales and like-for-like sales increased by 6.5% to SEK 27,066m and by 4.3% respectively (€2.6bn). The retailer attributed this to “a higher number of customer visits and a higher average ticket value… Eurocash also performed strongly during the year”

…As ecommerce roll out continues

During 2018, Willys continued to roll out ecommerce to an additional 22 stores. At the end of the year, Willys offered online shopping in a total of 56 stores in 30 cities. The rollout will continue to ten more cities in 2019. 

Hemköp: +3% to €1.3bn…

Hemköp, Axfood’s supermarket banner, saw Group-owned and franchised store sales increase by 3% to SEK 13,691m (€1.3bn). Like-for-like performance was driven by franchise stores, with these store sales increasing by 3.8%. 

…As the banner plans to invest in counters, sushi and meal solutions

The banner has announced it will invest in “more in-store service counters, store-prepared food, sushi bars and other meal solutions”. 

Other highlights: Urban Deli, private label, organic and vegetarian

Other notable developments include:

  • Axfood increased its ownership in Urban Deli from 50% to 90.7% in December 2018. Axfood and Urban Deli will collaborate more closely in 2019, to develop a great range of meal solutions.
  • Private label share of sales increased by 1.0% to 29.2% of sales.
  • Organic products accounted for 6.6% of total food sales. Axfood has set a target for organic sales to reach a 10% share of total food sales by 2020.
  • The popularity of vegetarian Axfood also enjoyed growth in vegetarian alternatives, with these products growing by 22% in 2018. 

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