Ahold has revealed it has reached an agreement with Swedish retail development company Hakon Invest on the sale of its 60% holding in ICA.

The deal allows Ahold to focus on its core markets of the Netherlands and US

What could this mean for ICA and Ahold?

ICA’s new strategy focuses on strengthening both customer loyalty and its offering, broadening its sales channels and investing in staff training. These are ambitious plans and having Hakon Invest as a majority stakeholder rather than a Netherlands-based retailer could aid ICA’s future growth.

Ahold’s priority markets are not Scandinavia or the Baltics - it is concentrating on its domestic market and the US - so the sale of its ICA stake will help it focus on those. One might ask whether this deal could mean direct competition between ICA and Ahold. This will depend on whether Ahold decides to exit the Scandinavian markets altogether or not. In selling its stake and showing no interest in investing or acquiring other networks, Ahold appears disinclined to compete with ICA.

Would this have any significant impact on Scandinavian and Baltic retail?

ICA is an established grocery leader in Sweden, so scope for growth is fairly limited in terms of store count and sales revenue. In Norway, the retailer has not shown impressive development over the past few years. Hakon Invest might help the retailer improve its position in the country. Yet, given Norway’s highly concentrated grocery market, a big impact looks unlikely.

On the other hand, the Baltics afford ICA greater scope for growth. Looking at those markets separately, Lithuania does not appear to offer the best growth potential, because the grocery market is largely dominated by strong local players such as Maxima, IKI and Norfa.

So it is unlikely that ICA’s ownership change could make a significant impact on Lithuanian retail, unless the retailer acquired one of the big players.

The same can be said of Estonia. Although ICA’s Rimi banner has a greater presence in that country, the grocery market is largely controlled by Estonian operators such as ETK and Kaubamaja.

However, in Latvia, Rimi stores are better established and the grocery market is dominated by foreign-owned retailers like Maxima and IKI and the Finland’s SOK. Therefore, there could be an opportunity for ICA to further establish itself there.

  • Laimonas Gineika, associate analyst, Planet Retail.

For more information contact us on:

Tel: +44 (0)20 7715 6000

Email: info@planetretail.net