The Willys supermarket chain was the standout performer for Swedish retailer Axfood in what the operator described as a 'turbulent' first half of its financial year.
The Willys business saw net sales rise 10.7% in the period, reporting sales of SEK 15.8 billion (€1.53 billion) in the first half, with the business boosted by the fact that 'cross-border shopping has essentially come to a halt', according to the retailer.
Banner Performance
Axfood's Hemköp outlets saw flat sales in the half-year period (+0.1%) to SEK 3.2 billion, with the group saying that both the transition from group-owned to retailer-owned stores, coupled with lower footfall in larger cities, impacted its performance.
The addition of the nine Östenssons stores to the Hemköp banner, which was completed in September of last year, had a positive effect, however.
Sales at its Axfood Snabbgross business were down 1.1% due to the lower demand from the restaurant and café business, while its Dagab logistics unit posted a 7.7% increase in sales.
Overall, consolidated net sales for the half-year period totalled SEK 26.6 billion, an increase of 6.7& on the previous year.
“In the second quarter, Axfood reported higher sales and once again grew faster than the market, with 8.3% growth in store sales," commented president and CEO Klas Balkow.
"Very strong like-for-like growth for Willys’ stores, which in a time of great economic uncertainty benefits from the position as Sweden’s leading discount chain, compensated for the parts of our business that have been negatively impacted during the pandemic. During the quarter, we continued to work hard to ramp up our digital offering and ways of working, and as a result, we also continued to grow faster than the market online, with growth of a full 128%."
Profit Performance
Operating profit for the half year was SEK 1.15 billion, an increase of 5.7%, while operating margin was 4.3%.
According to Axfood, the increase in operating profit was boosted by the performance of Dagab in the second quarter, however this was countered by a negative result for its Eurocash and Axfood Snabbgross businesses.
Axfood Snabbgross saw a 22.1% decline in operating profit for the period, while operating profit at Willys was up 11.5% and at Hemköp was up 2.3%.
On the continued impact of the coronavirus on its operations, Balkow added, "The pandemic has prompted more and more people to shop online, and we are seeing a steady stream of new customers, not least in the older age groups.
"At the same time that we have devoted efforts to meeting new needs and behaviours, during the quarter we continued working with sustainability and with taking steps toward developing our business for the future.”
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
