A turbulent 2022 for ICA
"We are leaving a year that has been exceptionally turbulent. We had a lower result and margins than last year in ICA Sweden and in addition the profit sharing from the ICA stores is lower compared to 2021", comments CEO Nina Jönsson.
Historically speaking, ICA has been the winner in Sweden over several decades, with Axfood as the respectable number two and Coop as the losing part. The pandemic seems to have changed this, at least in the short term.
ICA is no longer sovereign (to say the least), is losing market share and has chosen to withdraw the company from the stock exchange in 2022. In the opinion of many, a poorly reasoned decision which also led to an embarrassing court scandal about insider trading.
Hence, it is probably no coincidence that former CEO, Per Strömberg, resigned from the top job at the end of last year.
From 2023 Nina Jönsson is in charge and she has a lot to deal with. Not least the unpleasantness of losing market share to listed Axfood and others.
Admittedly, Axfood is taking market share due to the acquisition of Bergendahl, but still ICA feels a stronger competition from Axfood then in previous years.
In short the main problem for ICA is Willys, Lidl and Aldi and discount chains in general. ICA has not been willing to invest in that sector and are now losing big because of that. This is and will be Nina Jönsson's main challenge in the long term.
In the shorter term, the main challenge is probably to find the balance between online shopping and traditional supermarkets. In recent years, ICA has, in the opinion of many, spent too many resources on online shops and home deliveries that are not profitable.
A fine balance for Nina Jönsson
«It is of course of great importance to be able to meet the customers' demands for good and affordable products, and there we work closely with the ICA merchants to jointly calibrate the measures correctly. Creating a winning offer for food, pharmacy, mortgages, banking and insurance will give us growth power, while making a difference in our customers' everyday lives”, concludes Jönsson.
2022 in numbers
- Turnover SEK 136 billion
- The operating margin for ICA Gruppen fell during Q4 2022 to 3.9% (4.0% in 2021)
- Operating profit for the fourth quarter of 2022 (SEK 1,382 million) rose, driven by high inflation, with 6.4% compared to the fourth quarter of 2021 (SEK 1,298 million).
- Turnover for Q4 increased 8.2% to SEK 35,547 million (SEK 32,860 million), also driven by inflation.
- Loss of volume puts pressure on ICA Gruppen's grocery business results and margin in ICA Sweden.
- Operating profit decreased by 12.0% to SEK 767 million in the fourth quarter compared to the same quarter in 2021. The margin for Q4 fell to 3.1% (3.7%).
- ICA Sweden announced on 9 December that an efficiency program is being implemented which initially means that around 200 positions are liquidated.
- Rimi Baltic showed strong development in the fourth quarter.
- Apotek Hjärtat continues to gain market share, however cost increases meant that the result decreased.
- ICA Bank's business volume, including ICA Insurance, continues to grow even though the result in the fourth quarter is negatively affected by higher credit losses.