Demographics

How changes are taking place

• The population is becoming both younger and older
• Income gaps in society are increasing
• More diversity and a higher number of people born outside Sweden
• Continued rapid pace of urbanisation, affecting both cities and the countryside

Impact on the food retail market

• As a result of demographic changes, demand is changing when it comes to assortment and price point
• Urbanisation is creating new attractive store locations and scope for online shopping while certain locations are becoming less attractive

How Axfood operates

• Continual assortment development to offer affordable, good and sustainable food as well as meeting demand for an international assortment
• Establishment of stores and online shopping in growth locations with convenient transportation links
• Clear values and an ambition to reflect the diversity found in society in order to meet various needs

Competition

How changes are taking place

• Traditional food retail companies focus more on food and invest more based on price considerations
• Innovative companies are challenging
• The market’s players are creating ecosystems of products and services
• Innovative, small players are seeking partnerships

Impact on the food retail market

• Increased competition from traditional as well as new players and from other related industries
• Greater selection for consumers and more stringent requirements
• Increasing importance of data and consumer insight to respond to changing customer needs and behaviour
• The market is being renewed through value-creating services such as meal solutions, price comparisons, recipe websites and home delivery

How Axfood operates

• Development of distinctive concepts to meet various customer needs
• Clear Group-wide collaboration to add customer value and increase competitiveness
• An efficient and attractive assortment and a distinct price position
• Continual development of loyalty programmes to ensure relevance and attractiveness

Price value

How changes are taking place

• Increasingly strong discount trend, particularly in times of economic uncertainty and high inflation
• Digitalisation is leading to increased price transparency
• A low price is not the only factor determining whether a product offers value for money – pleasant service, attractive peripheral services and a high-quality assortment are also important

Impact on the food retail market

• Increased price consciousness is having a positive impact on certain market segments, particularly discount players
• Price comparisons require market players to continually monitor their price positions
• Consumers are focusing more on value for money and demanding an assortment that offers alternatives to strong global and national brands
• Private label products and large purchasing volumes are key for being able to offer price value

How Axfood operates

• A focus on strengthening Willys’ position as Sweden’s leading discount grocery chain and ensuring that all concepts in the Group deliver value for money
• Large selection of attractive, affordable and high-quality private label products
• Efficient processes and cost control in all operations
• Comprehensive and frequent price evaluations to ensure price positions

Sector convergence

How changes are taking place

• Long-term trend toward increased sector convergence, especially in major cities
• The line between sectors is becoming blurred as many companies offer products and services that traditionally are not part of their core businesses

Impact on the food retail market

• Groceries are being sold to a greater extent at restaurants, convenience stores and other retail venues
• The durable goods sector is capturing volumes in certain categories
• In the long term, the share of household expenses consumed at cafés and restaurants is expected to rise
• Investments in meal solutions with the establishment of new distribution channels

How Axfood operates

• Development of the assortment, operations and concepts taking sector convergence into consideration
• The selection of meal solutions is continuously evolving to meet rising demand

Health and sustainability

How changes are taking place

• There is a growing awareness about the impact of food on the climate and health, especially among young people
• Consumers believe that food retail companies have a major responsibility for the development of sustainable and healthy food
• More and more consumers are open to changing their food consumption over time in order to reduce their carbon footprint

Impact on the food retail market

• Sustainable food consumption is imposing high demands on changes in the food production chain
• Issues such as responsibility, environmental impact and health are becoming increasingly important, and conscious consumers are manifesting their lifestyles through active food choices
• Many people want more information about the origin, quality and ingredients of products
• Conscious consumers are looking for food inspiration and want help and guidance to make sustainable and healthy choices

How Axfood operates

• Assortment development and focus on sustainability-labelled products
• In-store information and inspiration as well as development of loyalty programmes in terms of health and sustainability
• Focus on sustainable packaging, reduced food waste, seasonal food, social responsibility and traceability
• Environmentally certified stores
• Engagement with decision-makers and annual publication of the Mat 2030 report, Axfood’s proposal for a sustainable food strategy for Sweden.

Digitalisation

How changes are taking place

• More digitalisation in all areas of food retail, from product development and purchasing to logistics, ways of working, marketing and customer meetings
• The share of the total market attributable to e-commerce has risen in recent years, although growth has slowed down after the pandemic
• New payment methods from new players are changing the way data is accessed and collected

Impact on the food retail market

• Demand for new technical solutions and more in-store digital tools
• New and changed shopping behaviour opening up for new business models and businesses
• More stringent requirements from consumers concerning user-friendly online shopping platforms
• The e-commerce business model is challenging, especially for pure-play online retailers and for home delivery

How Axfood operates

• A flexible in-store shopping experience with digital tools that simplify the shopping process, such as self-service and self-scanning as well as modern payment terminals
• Investments in digitalisation of core processes within pricing and assortment, product supply and in store
• Continued initiatives in e-commerce and development of the digital customer meeting, flexible delivery options including home delivery as well as store pick-up