Axfood Reports Strong Growth and Strategic Investments in 2024, Sets Sights on Expansion and Sustainability
Axfood has wrapped up a successful fourth quarter and full year, marked by significant growth in customer traffic, increased sales volumes, and strengthened market positions. The company’s continued strategic investments in store expansions, logistics improvements, and sustainability initiatives underscore its commitment to long-term growth and competitiveness. With an eye toward the future, Axfood is set to further solidify its position in the hypermarket segment following the acquisition of City Gross while continuing to drive operational efficiencies and expand its presence across Sweden.
Strong Market Position and Continued Growth
Axfood has maintained a strong trajectory despite an evolving retail landscape characterized by more cautious and price-sensitive consumers. In 2024, the company increased its market share, demonstrating resilience and adaptability. During the fourth quarter, Axfood’s retail sales grew by an impressive 14.1%, fueled by sustained customer traffic, increasing loyalty, and volume growth.
“As we navigate shifts in consumer behavior and intense market competition, our unwavering focus on productivity and cost efficiency continues to provide a solid foundation for growth,” stated Axfood’s leadership. “Our strong development in customer traffic, sales volumes, and market positioning is a testament to the trust consumers place in our brands.”
Axfood’s investment in strengthening its base operations ensures continued growth in the competitive food retail market. The company’s ability to maintain a robust multi-brand strategy enables it to appeal to diverse consumer segments, from value-seeking shoppers to those looking for premium grocery experiences.
Expansion and Strengthening of Core Brands
Axfood’s core brands—Willys, Hemköp, and Snabbgross—have all demonstrated strong performance, further reinforcing the company’s market presence.
- Willys: As Sweden’s leading discount grocery chain, Willys reported 4.8% growth in the fourth quarter, outperforming the market. The brand’s expansion strategy remains aggressive, with a continued emphasis on opening new stores to increase accessibility for budget-conscious consumers. Willys has never held a stronger market position, and its momentum is expected to continue into 2025.
- Hemköp: The premium supermarket brand continued to gain traction, posting a 4.6% like-for-like growth rate in the quarter. Investments in store expansion and improvements in customer experience have bolstered Hemköp’s standing in the market. Although new store openings incurred additional costs, the brand’s long-term profitability remains strong.
- Snabbgross: The foodservice segment faced a challenging café and restaurant market but managed to increase its customer base and volume. With 6.3% growth in the fourth quarter, Snabbgross demonstrated resilience and a stronger market position, sustaining earnings levels in line with the previous year.
Enhancing Logistics and Operational Efficiencies
A major focus for Axfood in 2024 has been the optimization of its logistics operations, which play a critical role in ensuring cost-effective supply chain management and store replenishment. The new logistics center in Bålsta is now fully operational, with efforts concentrated on increasing productivity and efficiency. The integration of e-commerce fulfillment capabilities into Bålsta’s operations marks a crucial step in improving Axfood’s digital and omnichannel presence.
Additionally, the expansion of the high-bay warehouse in Backa, Gothenburg, and the finalization of optimization initiatives at the fruit and vegetable warehouse in Landskrona are progressing according to plan. These investments are set to improve overall supply chain effectiveness, reducing costs while enhancing product availability for customers.
City Gross Acquisition: A Strategic Move in the Hypermarket Segment
The acquisition of City Gross, completed on November 1, 2024, represents a transformative step for Axfood. By entering the hypermarket segment, Axfood expands its presence in one of the fastest-growing areas of the Swedish food retail market.
City Gross provides Axfood with new growth opportunities and access to a broader customer base. Several initiatives have been implemented to enhance City Gross’ competitiveness, including brand and concept refinements, improvements in store operations, and adjustments to product assortments.
Additionally, Axfood is planning structural changes at select City Gross locations, including the potential conversion of some stores to alternative formats that better align with their respective local markets. These efforts are expected to drive profitability in the second half of 2026, reinforcing Axfood’s long-term strategy.
Commitment to Sustainability: Achieving Key Milestones
Sustainability remains a cornerstone of Axfood’s corporate strategy, and 2024 marked significant progress in environmental initiatives. Key achievements include:
- Reduction in Carbon Footprint: Axfood has accelerated the shift to renewable fuels, advancing its original timeline by five years. This transition has resulted in a 30% reduction in CO2 emissions from transportation compared to the previous year and nearly 60% over a three-year period.
- Food Waste Reduction: The company successfully met its goal of reducing food waste by 50% (compared to the 2015 baseline) one year ahead of schedule.
- Promoting Sustainable Consumption: While consumer price sensitivity has impacted demand for sustainable and healthy food products, Axfood continues to invest in customer education and product innovation to encourage responsible shopping habits.
2025 and Beyond: Expansion, Investment, and Strengthened Competitiveness
Looking ahead to 2025, Axfood remains focused on growth and market expansion, with ambitious plans to open 10–15 new Group-owned stores. The majority of these openings will be Willys locations, further reinforcing its market leadership in the discount segment.
With a strong financial position, Axfood plans to allocate between SEK 1.6 billion and 1.7 billion in investments throughout 2025, focusing on store openings, logistics enhancements, and strategic business development. The company is also proposing an increased dividend of SEK 8.75 per share, to be paid in two installments.
Conclusion: A Year of Transformation and Growth
Axfood closes 2024 on a high note, having strengthened its market position, expanded its store network, enhanced logistics operations, and made significant strides in sustainability. With a solid foundation in place, the company is well-positioned to continue challenging competitors, capturing new opportunities, and delivering value to both customers and shareholders in 2025 and beyond.
As Axfood looks to the future, its unwavering commitment to efficiency, sustainability, and customer satisfaction will remain at the core of its operations, ensuring that it continues to thrive in an ever-evolving retail landscape.
