Axfood tightens discount focus

- Last updated on GMT

Related tags: Wal-mart, Retailing, Supermarket

Axfood, the Swedish retail group, has completed the remodelling of
35 Matex discount stores, rebranding them under its own Willys
banner. The move is part of a wider strategy of focusing on a
handful of brands for different store formats in a bid to improve
customer loyalty.

It has taken over three years for Axfood​ to complete the conversion of all the Matex stores, but during that time the fascia has grown substantially, with 56 new stores added to the chain through construction or acquisition, giving a total of 84, of which three are franchised.

"We have conducted very extensive refurbishing of existing stores, built six new stores, and acquired and remodelled 15 stores, while at the same time increasing our profitability,"​ said Anders Stralman, president of Willys.

The benefits of focusing on one single brand for the discount chain are already being seen, with sales reaching SK10.5 billion in 2003, making Willys by far the biggest discount store operator in Sweden, according to the company.

Nor is Axfood resting on its laurels, with several new stores planned for the Greater Stockholm area - at least three outlets are scheduled for opening this year, including the biggest Willys store to date in the suburb of Rissne.

Willys stores are discount supermarkets with a wide product offering of around 7,000 items, covering 95 per cent of consumers' annual grocery needs, the company claims. Unlike some discount store chains, Willys has a particularly strong focus on fresh products, such as fruit, vegetables, meat and dairy products.

The Willys chain prides itself on its efficiency, with the significant buying power of the Axfood group, which also includes the Hemköp supermarket chain and Willys Hemma, a convenience-cum-discount format, as well as the Spar franchise in Finland, allowing it to keep its prices as low as possible - a key factor in one of the EU's most expensive food markets.

The downmarket store format - shoppers usually pick products directly from pallets in the stores - also keeps the overheads down, the company said.

Related topics: Market Trends

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