Axfood summarises another strong quarter with high customer traffic, volume growth and increased market shares, as well as positive earnings trends in all operating segments. We continue to invest in strategically important areas in order to become even more efficient and further improve our competitiveness. In recent years, our logistics structure has been developed to enable continued profitable growth, and during the quarter we announced our plans to establish a new, highly automated logistics centre in Kungsbacka with the aim of increasing our capacity and efficiency also in southern Sweden.
As in previous quarters, the third quarter of the year was characterised
by intense market competition and high price awareness among
consumers. We are successfully navigating this changing and dynamic
climate by leveraging the strength of our business model of strong and
distinctive concepts working in collaboration. Thanks to affordable and
attractive offerings, more and more consumers are choosing to shop
with us. Having maintained our momentum, we delivered a strong
performance in the quarter and gained market shares.
High customer traffic, volume growth and increased market shares
During the third quarter, Axfood’s retail sales increased approximately
19% and just over 6% excluding City Gross, while market growth
amounted to slightly more than 5%. This performance was driven
both by Willys and by Hemköp, which reported higher volumes as
a result of positive customer traffic and customer loyalty.
With its position as Sweden’s leading discount grocery chain,
and a highly attractive concept among households, Willys is continuing
to develop its offering. Among other initiatives, existing stores are
rapidly being upgraded to the new Willys 5.0 store concept, and the
rate of new store establishments is also accelerated in the coming
years, with the aim of opening at least ten new stores each year.
Hemköp, which operates in the traditional grocery segment,
is also modernising stores at a rapid rate in order to enhance the
customer meeting. Its offering is continuously being developed, with a
focus on price value, fresh products and meal solutions. Our restaurant
wholesaler, Snabbgross, delivered growth of 6% in the quarter.
City Gross was acquired nearly a year ago to create new growth
opportunities for Axfood. The organisation is following a clear plan and
has a comprehensive development agenda in place in order to reverse
the store chain’s weak development in recent years. We are seeing
positive trends in like-for-like growth and cost levels as a result of our
initiatives. City Gross has excellent potential as a pure-play hypermarket operator, an attractive segment that is continuing to account
for a growing share of the market. With a long-term perspective, we
leverage our knowledge and experience to develop and strengthen the
chain for the future.
Positive earnings trends in all segments
With increased loyalty and growth in the store chains, earnings
improved in all operating segments. In addition to efficiency and cost
focus in our base operations – with respect to both logistics and our
central processes and ways of working – the operating margin for the
Group as a whole increased.
Development of logistics in southern Sweden
Dagab is continuing its efforts to optimise the flow of goods and
streamline the Group’s new logistics structure. The logistics centre
in Bålsta, the fruit and vegetable warehouse in Landskrona and the
recently expanded high-bay warehouse in Backa are all clearly
contributing to the Group’s capacity and efficiency. We have also
initiated work to establish a new highly automated logistics centre
in Kungsbacka which will strengthen the Group's product supply in
southern Sweden. We are building for the future, and this new logistics
solution will create the conditions for us to continue to grow and
become even more competitive.
Initiatives to accelerate the green transition
The Food 2030 report, Axfood’s proposal for a more sustainable food
strategy for Sweden, was presented during the quarter. As a leading
player in food retail, we want to take the lead in sustainable development, and this report, which contains 105 solutions for promoting
sustainable food production and consumption, is an important part
of our social advocacy and work to drive industry issues.
As a Group, we also contribute to accelerating the green transition
in society. The phase-out of fossil fuels in our own and procured
transports continued to reduce our emissions during the quarter, and
our new solar park in Hallstavik in the Uppland region is now fully
operational. We also continued to launch innovative new products
focused on improved sustainability and health.
Leveraging the strength of our business model to continue to challenge and grow
Our performance in the third quarter demonstrates the strength of
our business model, with higher growth than the market and improved
earnings in all operating segments. The development shows how we
with our different concepts and brands drives loyalty and growth in
all segments of the market – both organically and through expansion.
With our integrated value chain, we create competitive advantages
and efficiency in base operations. Together with a high rate of
development, a strong corporate culture, and highly engaged
employees, I am convinced that we are poised to continue to challenge
and strengthen our market positions also in the years ahead.
Simone Margulies
President and CEO Axfood
