Important events in 2013
In 2013 ICA Sweden continued working on integrating the new Group strategies within the organisation. The most important priorities for the year were driving sales, continued development of the product range, increasing the percentage of private label products and ensuring prices are competitive and that the operations were efficient in general, with a focus on the logistics chain. Good results were achieved in all of these areas during the year.
New stores and further development
A total of 15 new ICA stores were opened with an even distribution across the store profiles. Seven of these replaced stores that have been closed. Another seven were newly established stores and one store was taken over from a competitor. Although a total of 24 ICA stores were closed, the net retail space increased in 2013.
In 2013 the decision was taken to establish ten new ICA To Go stores over the next two years. ICA To Go is a concept with smaller stores that are highly accessible and offer ready-prepared meal solutions. The concept has existed as a pilot operation in Stockholm since 2010. The customers appreciate the product range, the prices and the experience of having healthy food choices. To further increase accessibility, a number of in-store concepts are planned for existing ICA stores.
Cura pharmacies continued to improve their position in the pharmacy market. Altogether 10 new Cura pharmacies were opened, equivalent to 45% of all new pharmacies in Sweden. Cura’s sales growth shows that customers appreciate the concept of pharmacies conveniently located inside or adjacent to large ICA stores and the long opening hours. The strength of the concept is the benefits gained from the customer flows that the stores and pharmacies generate for each other. At the end of 2013 there were 58 Cura pharmacies in total around the country.
Marketing and loyalty programmes
ICA is constantly working on increasing loyalty among existing customers while also reaching new target groups. While traditional marketing channels in the form of advertisements and direct mail are still important tools, the significance of loyalty programmes, digital marketing and a strong online presence is growing. Marketing is also becoming increasingly customer-specific. ICA.se and the ICA Handla online shopping app are good examples of effective and growing channels. The app, which was enhanced in 2013, had been downloaded more than 760,000 times by the end of the year. ICA.se is still Sweden’s biggest food website, with around 1.3 million visitors every week.
Private label products
One of the most important strategic priorities is increasing the proportion of private label products.
A good private label range offers benefits for customers and stores alike. It creates breadth and depth in the product range at attractive prices. It also strengthens ICA’s brand and the uniqueness of ICA stores, while improving profitability.
In 2013 private label brands accounted for 21.4% of sales in Sweden, an increase of 1.3 percentage points compared to the previous year. One in five products sold were private label products. A total of around 450 new private label products were launched during the year, many of which were in the fresh foods segment.
The task of laying the foundation for ICA’s planned online offering continued in 2013. The goal is to start launching online sales solutions in autumn 2014. The initiative is based on the participation of local stores. Customers choose the store in which they want to shop and where they want to pick up their pre-packed grocery bags. Depending on the market and the competition, stores may also offer home delivery. Over time, the idea is to offer ICA’s entire range of products for purchase online.
ICA’s Grocery Bag, a service provided by individual stores, continued to develop well during the year. Several versions can be ordered, and they can either be delivered or picked up at the store.
Work on certification continued
The customers have high expectations with respect to food safety and quality. ICA therefore works continuously on facilitating quality assurance work in the stores and ensuring that ICA’s own products are safe and sustainably produced.
At the end of 2013 most of the ICA stores had met the industry quality standard and 340 had been certified in a third-party audit. ICA Sweden’s sourcing and logistics operations are certified to international environmental and quality standards, which means that quality and environmental work is carried out according to structured and precise routines.
Sweden’s most sustainable brand
In 2013 ICA ranked number one in the Sustainable Brand Index study, which recognises Sweden’s most sustainable brands. In the study, 9,000 consumers in Sweden ranked which brand they considered was performing the best in environmental and social responsibility. Consumer magazine Råd & Rön also reviewed different food companies’ corporate social responsibility and how the companies were acting to impact the conditions in developing countries where food is produced. ICA was the only food company to get a green light in the review.
Sourcing and logistics
In the area of logistics, there are constant efforts to improve the service to the stores by having a more efficient and well-adapted logistics structure. In recent years several steps have been taken in this area. One of the main ones was the closure of the warehouses in Umeå and Årsta, and procurement of new goods transportation services. The effects of these measures are beginning to be apparent in the form of more efficient flows and reduced logistics costs.
Another step in this direction in 2013 was a decision to expand the warehouse in Helsingborg. The new warehouse, which is expected to be ready in the third quarter of 2015, will enable improved service and greater efficiency to be achieved. It will also result in significant environmental gains.
In connection with the expansion in Helsingborg, the warehouse in Arlöv will be phased out and the warehouse in Kungälv will in future act as a central hub for fresh foods and non-food items.