Swedish retail group Axfood has reported a strong performance in the third quarter with increases in both sales and profits. Consolidated sales saw a boost of 3.5 per cent during the quarter, to SEK 9,044 million (about €1,044 million), with like-for-like sales remaining unchanged. The company's nine month performance showed a 4.5 per cent increase in sales to SEK 27,054 million.
Operating profit for the period amounted to SEK 368 million, a slight decrease from SEK 370 million in the comparable period last year. The figure for the nine months to September shows an increase of 0.9 per cent to SEK 936 million, working towards the group's goal of matching 2011's operating profit.
Profit after tax showed a minor drop to SEK 265 million from SEK 267 million last year.
The report noted that the group reached its target in September of 25 per cent private label share, which is part of its strategy for "profitable growth". The Garant brand has been rolled out across the group's various banners and its popularity with customers is credited with the increase.
Group CEO and President Anders Stralman attributed the company's solid performance to efficiency and cost control in all areas of the business. These strict measures will remain in place although an "ambitious pace of investment" will continue, with store modernisation a "prerequisite" for a better shopping experience.
Acknowledging market difficulties, Stralman said, "The economic turbulence in Europe and the USA remains. This is creating uncertainty about how the Swedish economy will develop moving forward. Despite this, Swedish consumers are still cautiously optimistic."
Axfood AB operates 244 stores under its retail banners Willy's, PrisXtra and Hemkop, the latter of which also operates on a franchise basis.
ESM will have an in-depth interview with Axfood CEO and President Anders Stralman in our November/December issue.
© 2012 - ESM: European Supermarket Magazine
