Danish Salling Group criticizes Carlsberg

Salling group HQ. Photo: Roar Paaske Fotografi/Salling Group Press Photo
Photo: Roar Paaske Fotografi/Salling Group Press Photo
By Reidar Molthe

15 May 2023 09:13

Danish Salling Group criticizes Carlsberg

“It is not the supermarkets that have shovelled money into the inflationary year 2022,” emphasizes Salling Group's outgoing CEO, Per Bank. “Carlsberg earns 12 times more than grocery retailers in Denmark, it is not fair”, he stresses.

Per Bank. Photo: Salling Group
Salling Group's outgoing CEO, Per Bank, argues that suppliers in Denmark have higher profits than grocery retailers. Photo: Salling Group

Per Bank will step down this autumn as managing director Salling Group after 11 years in the post. He will then be CEO of the Canadian retail giant Loblaw – a company with 2,400 stores and a turnover of almost DKK 300 billion.

Loblaws is considered by many to be the world's best supermarket chain. That a Scandinavian is offered the CEO job in Loblaw says a lot about the recognition of Per Bank and maybe also the reputation of Scandinavian grocery and retail industry.

In the Salling Group's annual report for 2022, earnings have fallen. Denmark's largest grocery group reported a decline in profits of one billion kroner - from 1.9 billion to 972 million DKK. This is due, among other things, to the fact that despite rising prices from suppliers and energy bills, the Salling Group has chosen to absorb a good part of inflation, the group claims.

Only losers

Salling Group

Number of stores in the Salling Group per 31 December 2022

  • Netto Denmark: 520
  • Netto Germany: 342
  • Netto Poland: 663
  • Bilka: 19
  • fötex and fötex food: 109
  • Salling Department Stores: 2
  • BR: 29
  • Starbucks: 14
  • Carl's Jr.: 16
  • Basalt: 10
  • Total: 1,724

Salling Group employs nearly 60.000 employees across Germany, Poland and Denmark.

"What I have said is that there are only losers in this situation. It is the suppliers, the customers and us. Having said that, there is still a profit pool with the suppliers, which is far bigger than with us” argues the top manager, Per Bank.

He mentions the Carlsberg brewery group as an example:

"Carlsberg has roughly the same turnover as us, but earned 11-12 billion, and the entire Danish grocery trade together earns around one billion. So, Carlsberg earns 12 times as much as the entire Danish grocery trade with half the turnover,” Per Bank claims.

He emphasizes that the same can be said of many suppliers, even the smaller ones, and that the Salling Group continuously tries to get them to lower their prices.

The numbers tell the truth, or do they?

Across the country's four largest grocery groups, Salling Group, Coop, Rema1000 and Dagrofa, which have all delivered annual accounts for 2022, there was a turnover of DKK 145 billion. The operating result (ebit) of DKK 2.1 billion and a result before tax of DKK 1.2 billion.

Carlsberg came out of 2022 with a turnover of DKK 70 billion, an operating profit of DKK 11.5 billion and a profit before tax of DKK  10 billion.

It is, however, difficult to compare results and particularly results as a percentage of turnover. If you look at return on invested capital, the picture is often different. Regardless, operating results are often used as a good (or bad) bargaining chip.

Carlsberg does not want to comment on Per Bank's statement.

Sources: Salling Group, Berlinske, Retail News.