Axfood Sees Sales, Profitability Up, Despite Challenging Operating Conditions
Swedish retailer Axfood has posted a 5.5% increase in consolidated net sales in its third quarter, along with a 11.3% increase in operating profits, while noting that the COVID-19 pandemic is 'putting demands' on its operations.
The retailer posted sales of SEK 13.4 billion (€1.29 billion) in the period, compared to SEK 12.7 billion (€1.22 billion) in the same period last year, in a quarter which was characterised by significant changes in consumer behaviour, it said.
As well as increased consumption at home, which had a 'favourable impact' on sales, businesses which had exposure to cafés and restaurants, as well as those located in cross-border shopping areas, were 'negatively impacted, although to a lesser extent than during the second quarter', it said.
Its Willys business posted a 8.3% increase in sales in the quarter, benefiting from a higher average basket and e-commerce growth.
However, Hemköp saw a 2.0% decrease in sales, largely due to greater exposure in city locations, as well as store conversions. This was offset by higher average basket size and online expansion, Axfood said.
Online sales were up 120% on the same period last year, boosted by the rollout of Willys and Hemköp e-commerce services to new cities in the past year.
“Axfood continues to gain market shares, and particularly noteworthy was growth for Willys, which is strengthening its position as Sweden’s leading discount grocery chain," commented Klas Balkow, Axfood president and chief executive.
"Profit for the third quarter was strong, and despite challenges for parts of our operations we improved our profitability. The pandemic is putting demands on our operations, which entails a strong focus on adapting to meet changed customer needs and behaviours. Despite this we continue to develop our business at a fast pace within many areas.”
Axfood's Snabbgross wholesale operation 'recovered faster than expected', the group added, posting a 4.9% increase in sales in the period
The retailer has also announced the rollout of Snabbgross Club, a new B2C service that enables shoppers the opportunity to purchase bulk products otherwise earmarked for restaurants and cafés.
"Despite the pandemic, that is very much in our focus, we continue to maintain a high pace of development in our investments for the future," Balkow added.
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