Together with Ica and Coop, Axfood accounts for 90 percent of the market. City Gross currently has 42 stores, mainly in the southern parts of the country, with a market share of approximately three percent.
The food chain has been making losses for some time now, which is a result of the high inflation.
– When you are small and alone, it is difficult to fight with prices, says Ulf Mazur on the independent site Matpriskollen.
Impact on prices
With the purchase of City Gross, the three food giants are growing in the market, which in turn can affect customers.
– Higher concentration means less competition, which does not usually lead to lower prices, says Ulf Mazur.
Despite that, Mazur believes that the outcome of the purchase will be affected by what the group chooses to do with the chain and that it therefore does not have to mean higher food prices.
He believes that, on the contrary, it can have the opposite effect, if City Gross becomes a stronger player that can stand up to the other stores.
– If you want to sharpen the prices at City Gross, then it can be really good for food prices. These are big stores, if they want to be more aggressive with City Gross, it benefits the consumer, he says.
Want to strengthen competitiveness
In the press release in which the group announced the purchase, Axfood writes that their goal is to strengthen the chain’s competitiveness.
– We look forward to working together to strengthen the chain’s position and more clearly challenge the major players in the growing supermarket segment, says Klas Balkow, president and CEO of Axfood in a press release.
For the deal to go through, it must first be approved by the Swedish Competition Authority or the European Commission.