Willy’s continues on a stunning growth streak
If the US companies Amazon or McDonalds, or Starbucks reported strong results for Q2/2023, Europe has its growth phenomenon. And of all categories, in groceries!
The Swedish grocery chain Willy’s continues its stunning growth streak of double-digit growth. The company reported a fifth consecutive quarter of 13+% growth with a 19,8% growth. In fact, Willy’s has outgrown Amazon’s sales growth for all of those five quarters.
Inflation helps, but Willy’s grows even faster.
A high inflationary environment naturally enables growth. However, Willy’s is one of the few European grocers who have grown faster than the grocery prices. This has led Willy’s to outperform the market by a wide margin.
Willy’s has grown more than 10%-points faster than the market for the last four quarters. That is a feat even the German discounters have found difficult to achieve.
Willy’s grew more in 2022 than Lidl, which reported an 18% growth for fiscal 2022 (3/2022-2/2023). During the same period (Q2/2022 to Q1/2023) Willy’s grew by 20,2%.
To maintain such high growth, Willy’s had to sacrifice some margin. The company’s profit margins declined from last year’s highs of 5,1% to 4,6% this year. Still a robust level of profitability.
Strong online grocery performance
The other parts of Axfood (the parent company of Willy’s) also saw growth, albeit slower. The interesting detail of Axfood’s growth was the online channel, which grew by 8,7%. The growth is an encouraging sign for two reasons.
Firstly, the online channel had seen declining sales for six consecutive quarters. Thus, this might be Axfood turning a corner for a more growth-oriented future online. Secondly, the online market saw sales decline by -2,5% during the second quarter. Especially the Click & Collect, which Axfood heavily relies on, declined more than the home delivery market.
It will be interesting to see how Axfood’s main rival, ICA, has performed in this difficult market. ICA Gruppen will report its quarterly figures next week.
