Swedish grocery retailer and wholesaler Axfood saw its share price fall today (8 February) despite recording record full-year results.

Shares were down 5.2% to SEK226.8 a share at 12:51 CET today after the operator posted a near 9% rise in profits for 2010.

Axfood’s full-year net profit increased 8.7% to SEK862m (US$134.1m), while fourth-quarter net profit rose 13.5% to SEK227m

During 2010, sales grew 5.8% to SEK34.26bn. Fourth-quarter sales were up 5.4% to SEK8.88bn.

While Axfood recorded a 3.9% increase in fourth-quarter sales ffrom its company-owned stores, as well as a 1.6% rise in like-for-like sales, it said that despite the economic recovery, food retailing “did not grow in pace with other retail sectors or the restaurant sector”.

It added that industry statistics showed that consumers gave more priority to consumer durables and restaurant visits through an “exceptionally cold winter”.

The company said that its discount chain Willys, supermarket and hypermarket business Hemkop and its Narlivs c-store outlets performed well, with Willys “continuing its profitable and stable development during the year and gained market shares”.

However, Axfood added that sales in its Stockholm-based PrisXtra chain “remained unsatisfactory”, with operating profit, excluding SEK14m in restructuring costs, reaching SEK9m.

Axfood said that it is aiming for private-label sales to account for at least 25% of sales. At the end of 2010, its share had reached 22%, with the company saying that while the trend remained positive, growth was slower than planned.

The retailer and distributor is forecasting operating profit of at least the same level as in 2010, revealing plans to open 14 stores, and modernise a further 40.

Click here for Axfood’s full earnings statement.