Food prices unexpectedly rose again in January. ICA now says it will spend a billion on holding it back.
– Our absolute goal is to be able to lower the prices of everyday goods, says CEO Nina Jönsson.
Two years in a row, Ica stores lost customers to competitors. In times of inflation, markedly cheaper grocery stores have simply done better, among other things, Axfood’s Willysbutiker has performed strongly.
But at the end of 2023, things turned around, according to the ICA CEO. For the first time since the third quarter of 2021, Ica Sweden grew faster than the general market, one percentage point more.
Lowers to the shops
ICA has invested in trying to contain the pace of price increases. From March, another billion kroner will be added to “price investments”.
– We lower the price for our stores, so the stores can lower the price vis-à-vis the customers of everyday goods, says Nina Jönsson.
Does it mean a concrete price reduction, or holding back increases?
– Both. It depends on the product categories. But our absolute goal is to be able to lower the prices of everyday goods, says Nina Jönsson.
However, the individual stores make their own arrangements, because each Ica merchant is his own.
Facts: The result in numbers
The ICA group made a profit before tax of SEK 931 million for the fourth quarter, which can be compared with the profit of SEK 185 million in the same period the year before.
Excluding non-recurring items, operating profit rose from SEK 1,389 million to SEK 1,487 million.
Revenue for the entire group, which also includes Rimi, Icabanken and Apotek Hjärtat, among others, rose by 7.6 percent to SEK 38.3 billion.
Revenues for Ica Sweden rose by 6.4 percent, which means that sales in volume grew slightly. Food price inflation was around six percent during the quarter. Profit also rose for Ica Sweden.
In January, the rate of increase in food prices lifted again, to an annual rate of just over four percent from having been around two percent in the fall, according to the monthly measurements of the Food Price Survey. Nina Jönsson does not directly answer whether it is a new trend break.
– It is still an uncertain situation in Europe. But we also see that the global price indices for production are going down now. But it’s war, it’s exchange rates, strikes that affect transport prices, says Jönsson.
Unsafe situation, then. But the trend is still clearly downward compared to the sharp price increases that have been.