Home purchases in the rush as Axfoods strengthens profitability

Axfood started 2024 with a retail turnover of just over SEK 16.2 million (15.2) during the first quarter. This corresponds to a growth of 6.9 percent.

The adjusted operating profit amounted to SEK 817 million (750), which corresponds to an increase of 9 percent. At group level, the adjusted operating margin strengthened and amounted to 4.0 percent (3.6) during the first quarter.

One of Axfood’s strategic group-wide goals is to reach an operating margin of at least 4.5 percent.

The second market continues to grow at a faster rate than the industry as a whole, but the differences in growth rates have narrowed significantly. Axfood’s 6.9 percent can be compared with an industry average of 6.4 percent during the same period.

– Given that we encountered uniquely high comparative figures, the beginning of the new year was strong and the growth in retail turnover amounted to 6.9 percent. That we are showing good growth in a market with low inflation is a result of significant volume growth, says CEO Klas Balkow in a press release.

The low-price chain Willys (including Willys Hemma and Eurocash), which has been the group’s driving force during food price inflation and sometimes grew twice as fast as the market, now reports a growth of 7.5 percent during the first quarter of the year. The adjusted operating profit increases from SEK 454 to 484 million, but the adjusted operating margin remains at the same level as last year: 4.3 percent.

In contrast, Hemköp and Tempo have significantly improved their operating margin. The chain has strengthened its adjusted operating margin from 3.9 to 5.2 percent. The adjusted operating profit was SEK 101 million during the first quarter of the year (71).

– With a focus on price value and store modernizations, more and more consumers are attracted to Hemköp’s concept, writes Klas Balkow in the quarterly report.

Despite the fact that Hemköp and Tempo operate within what Axfood calls the traditional life and grocery index compared to the entire industry – including low prices, the chain has grown faster than the industry for four quarters in a row. But during the first quarter of 2024, Hemköp showed comparable growth of 5.8 percent, which is just below the industry average.

The Axfood Group still delivers e-commerce growth at significantly higher levels than the industry, 8.9 compared to 4.8.