Swedish retail group Axfood has set out its strategy for the next four years including its ambition to increase its presence in Finland.
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Axfood said it expects its Willys chain, which currently has 85 stores, to increase its sales to approximately SEK17bn (US$2.2bn) by 2008. Turnover this year is expected to be SEK11.5bn. The company plans to open an additional 25 to 30 stores over the next four years.
The Hemköp chain, which currently has 86 stores, will be twice as large in 2005 following the conversion of Spar stores to Hemköp. Axfood’s wholly owned Hemköp stores are expected to increase their sales from approximately SEK6bn to SEK8bn by 2008. To achieve this expansion, Axfood expects to see growth at existing stores as well as new volume through the addition of 15 to 20 new stores through to 2008.
The company expects to add 30 to 35 new stores to its Willys hemma chain, which currently has 45 stores. Sales are expected to reach SEK3bn by 2008.
Axfood said its subsidiary in Finland, Spar Finland, had performed weakly in 2003 and 2004, partly due to new competition in the market. The company said it believes its market share in Finland is too small from a long-term perspective and Axfood is therefore aiming to increase its market presence.
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By GlobalData“We are sticking by our ambition to grow in Finland,” CEO Mats Jansson said. “However, this must be pursued from a base of profitable growth. Until the day we succeed in finding forms for acquisitions or a merger, we will be concentrating on developing Spar Finland’s ability to manage the competition.”
Speaking about Axfood’s future in general, Jansson said the company sees growth opportunities in three main areas.
“The first is growth through acquisitions and new store establishment, where we intend to establish and acquire between 70 and 85 stores during the next four years. The second is through new product segments or categories. One example of this is Super-Willys, where we have added a new range of specialty products. Our third growth area consists of the Nordic region, entailing acquisitions or mergers with companies in Sweden or other Nordic countries. In the future we will also be more receptive to partly owned companies surrounding individual concepts or store chains,” he said.
