ICA Norway enters cooperation agreement with Norgesgruppen
Solna, Sweden, January 14, 2013
ICA Norway has entered a cooperation agreement with Norgesgruppen in the areas of sourcing and distribution. The agreement is an important step for ICA Norway to ensure competitive prices for Norwegian customers and achieve long-term profitability.
In recent years, ICA Norway has taken many measures to improve its results. Among other things, ICA’s offering has been consolidated in two main chains, ICA and Rimi. The cooperation with Norgesgruppen is a major strategic effort.
“The changes that have recently been made at ICA Norway have been necessary, but not sufficient, steps to ensure the company’s future development. Major strategic and structural measures, mainly in sourcing and logistics, have been necessary to ICA Norway’s turnaround. The cooperation with Norgesgruppen is an important, forward-looking endeavor to eventually ensure a good customer offering and achieve profitability in ICA Norway,” says Per Strömberg, CEO of ICA AB.
The cooperation agreement coordinates distribution and logistics between ICA Norway and Norgesgruppen’s wholesale company, Asko. ICA will retain distribution in Oslo, Akershus, Østfold and parts of Buskerud, Vestfold, Hedmark and Oppland. In total, this represents over 40 percent of today’s distribution volume. ICA will also retain the warehousing operations in Oslo, while other warehouses will be gradually phased out. The cooperation with Norgesgruppen, which takes effect on April 1, 2013, will allow ICA to supply its existing retail network more cost-effectively. The changes will take effect gradually in 2013.
The cooperation also means that Norgesgruppen will manage parts of ICA Norway’s sourcing. However, ICA Norway will continue to source its private label products, fresh bread, some perishables and fresh seafood.
“The agreement with Norgesgruppen gives ICA Norway better purchasing prices and more effective distribution,” says Thorbjørn Theie, CEO of ICA Norway. “We have evaluated various alternatives and come to the conclusion that Norgesgruppen is the one that suits us best in terms of product selection and retail network. The agreement is forward-looking and gives us a good platform to strengthen our competitiveness.”
The changes in ICA Norway’s sourcing and logistics departments affect around 350 positions. The structural costs associated with these changes are estimated at NOK 150 million and will be charged against Q1 2013. The agreement will extend for at least five years and can be terminated by either party.
As required the competition authority in Norway, has been informed of the cooperation agreement.
ICA Norway operates 510 stores.
For further information:
ICA’s press office, tel +46 70 253 66 60
The ICA Group (ICA AB) is one of the Nordic region’s leading retail companies, with around 2,100 of its own and retailer-owned stores in Sweden, Norway and the three Baltic states. The Group includes retail companies ICA Sweden, ICA Norway and Rimi Baltic; ICA Real Estate, which owns and manages properties; and ICA Bank, which offers financial services to Swedish customers. ICA AB is a joint venture 40% owned by Hakon Invest AB and 60% by Royal Ahold N.V. of the Netherlands. According to a shareholder agreement, Royal Ahold and Hakon Invest jointly share controlling influence over ICA AB. Through Royal Ahold, ICA AB is part of an international retail network. For more information, please visit www.ica.se