Paul Foley’s opinion on ICA GRUPPEN Q3 results
“ICA GRUPPEN Q3 results show slow net sales growth” – this is one of Planet Retail’s headlines from the 9th November.
Some explanations are given in the article: low inflation, changes in basket size and frequency of visit, even low online sales penetration.
Paul Foley, Managing Partner at Foley Retail Consulting, has another explanation: the discounters! Lidl in particular is gaining ground in the market, it has become around the size when it starts to change from being a German retail operator doing business in Sweden to a Swedish one. Lidl is beginning to push its local credentials. Dairy, fish, meat and bread are undergoing a change of sourcing. This is not new, it’s a typical Lidl tactic once it has the buying power to be a credible part of the Swedish supply chain.
Beware ICA and the rest of the industry – the very high profitability of Swedish food retail looks like heavy weather sailing!
For a more detailed opinion contact us here.