ICA Sweden is facing a more competitive retail environment in the years ahead, according to a report from Barclays European Food Retail Equity Research.
In the report, Barclays says that it expects 'ICA's margins to erode as it faces a tougher competitive environment in its domestic market'.
While hard discount penetration in Sweden stands at just 5%, 'consumer habits are changing and Lidl is implementing the same strategy that has proved highly successful in other European countries,' Barclays noted.
The discounter most likely to impact ICA's performance is Lidl, whose 'strategy to upgrade its store concept has already started to bear some fruit in Sweden,' said Barclays. 'We forecast hard discounters will continue to grow, and price competition will intensify in the country, which will likely weigh further on ICA's margins.'
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
