It is fantastic to be able to say that my last year as CEO of ICA was also a year that ICA’s employees have every reason to feel proud of. We delivered our best operating profit ever.
ICA Sweden gained market share in a slumping market. Rimi Baltic has bounced back after the crisis years and ICA Bank attracted more customers, raised its business volumes and delivered a very good result. Our real estate company also lived up to high expectations. ICA Norway remains a major challenge, but after an improved fourth quarter we feel optimistic there as well. In 2011, we decided to streamline operations and introduce a new dual format strategy. Because of this strategy, the ICA Maxi Hypermarkets will be sold in 2012.
Profitability is important and rests on many cornerstones. They include our stores, product range, brand and responsibilities.
Stores
We continued to improve our stores throughout the Group. In Sweden, we expanded and secured locations for future stores, and in Norway we have continued to successfully convert Rimi stores. In the Baltic countries, we are testing a totally new format, a compact hypermarket about 2,000 m² in size. The idea is to serve smaller communities with a limited product range, but still offer the experience of a hypermarket. We will follow the outcome with great interest. Perhaps it can be converted to other markets as well?
Product range
To remain competitive, we have to keep up with major trends such as health, accountability and simplicity with products at a great price. Our private labels play an increasingly important role in this regard. In 2011, for example, we launched the ICA Basic product line and redesigned the packaging for our premium ICA Selection products. At the same time, we invested in extensive price cuts. We also worked with a concept to better meet demand for local foods. One example is Rimi Lithuania's shop-in-shop, Vikis, with products from local farmers and growers.
Brand
ICA’s brand is our biggest asset, and the work we are doing to build and strengthen the brand in the long term will pave the way for profitable new innovations. In 2011, for example, we rolled out the ICA Grocery Bag concept and the innovative ICA Student service. There are no limits to what we can do. The only thing – but importantly so – is that any new idea must help us to achieve our vision: they should make our customers’ lives a little easier. Cura pharmacies are an example of an idea that does just that. We already offer banking services. The next step could, for example, be to offer more insurance solutions.
ICA’s non-foods are worth an extra mention when it comes to making every day a little easier. We are always there for the customers, whatever they need. Each year we sell 1.1 million food containers, 735,000 and bags of tea lights and 4,672,219 rolls of garbage bags. Last year we helped customers find the right light bulbs when their old, environmentally hazardous incandescent bulbs were phased out.
Responsibility
A fixed point in our business model is taking responsibility. If we do not serve as a positive force in society for sustainable development today, we ruin any opportunity for good business in the future. Our values are summarized in seven position statements we call “ICA’s Good Business.” They describe how we work, from factory to store. Through them, we also cover the ten principles of the United Nations Global Compact, which ICA has signed. We have also signed the Global Compact’s Caring for Climate initiative. Through collaborations with the World Childhood Foundation, the Red Cross and the Worldwide Fund for Nature (WWF), among others, we are also trying to be a force for good in society. Three years ago we launched a project called We Can Do More, with the goal of finding meaningful employment for between 500 and 1,000 people with functional disabilities in ICA stores in Sweden. Today over 900 of them are working in nearly 650 Swedish stores. Rimi Baltic, which has also integrated disabled employees, received the National Business Award in Lithuania for its work.
Nothing we have done or will do would have been possible without the people in our organization. To date, our 100 top managers have completed ICA’s management program in partnership with the University of Oxford's Saїd Business School, and the training will continue throughout the organization.
All this is behind us and now it will be up to my successor, Per Strömberg, to take ICA to the next level. I wish him and all the fantastic ICA employees all the luck and success on their journey.
Kenneth Bengtsson
CEO