ICA Norway has agreed a purchasing and distribution collaboration with NorgesGruppen in order to ensure competitive prices and achieve long-term profitability. This 'major strategic initiative' is an effort to improve the performance of ICA AB's ailing Norwegian arm.
The five-year agreement will see a coordination of distribution and logistics between ICA Norway and NorgesGruppen's wholesale company, Asko from 1 April 2013. ICA AB CEO Per Strömberg said that "major strategic and structural changes, primarily in purchasing and logistics areas, have proved necessary to turn around ICA Norway." Sales for the third quarter, ending 30 September 2012, were down 15.6 per cent at ICA Norway, with a 6 per cent decrease for the first nine months of the year. Strömberg added, "Cooperation with NorgesGruppen is an important and forward-looking effort to eventually secure a good customer offering and reach profitability in ICA Norway."
Under the new deal, NorgesGruppen will handle part of ICA Norway purchasing, although the retailer says it will continue to deal with buying for private label, fresh bread, some fresh produce and fresh seafood.
Thorbjørn Theie, CEO of ICA Norway, commented on the collaboration, "We have evaluated various options and concludes that NorgesGruppen is the option that suits us best, both in terms of product range and store network. The agreement is future-oriented and gives us a great platform to strengthen our competitiveness."
NorgesGruppen claims to be Norway's largest retailer, with a strong wholesale business. It operates 1,700 retail outlets in the country including the symbol banner SPAR. (14 Jan)
© 2013 - ESM: European Supermarket Magazine by Sadhbh Connor
