Challenging times for LMK Group

The Swedish meal kit company LMK Group (originally Linas Matkasse) is facing some challenging times as the pandemic is fading away and the competition is heating. LMK saw sales grow for 8 % in the Q3/2021. Growth is always good, but compared to the industry standard set by HelloFresh (+46 %), growth by LMK was meager.

When the sales numbers are broken down based on geographies, LMK’s growth was driven by it’s biggest market: Norway. The Norwegian business grew by 26 %, whereas the sales in Sweden declined by -4 %. The company stated Norway has the biggest potential for the company, because the market does not have as much competition as Sweden and Denmark have. However, HelloFresh has recently launched in Norway. That will be a big challenge for LMK, especially as HelloFresh has also launched in Sweden a bit earlier.

Another challenge for LMK Group is the declining profitability (-7,9 % EBIT margin compared to -1,6 % margin a year ago). Q3 is traditionally the least profitable for meal kits (as stated but HelloFresh also). and LMK is still on track to be profitable for the whole year.