Axfood AB (publ)

Good morning, this is the Axfood First Quarter 2026 Telephone Conference. And with me today are Simone Margulies, President and CEO; and Anders Lexmon, CFO.

In the Investors section of our website, you will find the presentation material for today's call. We encourage you to have that presentation at hand as you listen to our prepared commentary.

After the presentation, we will be taking questions. A recording of this call will be made available on our website.

So with that, I will now hand over the word to Simone. So please go to Page 2.

Thank you, Alex, and good morning, everyone. We summarized the quarter with volume growth, improved efficiency and increased profitability, and that's in a market that is characterized by a high activity level.

Through a clear customer focus and collaboration, we continue to create value with our strong and distinctive concepts. Before we start the presentation, I briefly want to comment on the situation in the world around us.

It is clear that global uncertainty has increased over the past few months, and it's currently very difficult to assess the long-term effects of the war in the Middle East. In recent years, we have successfully navigated a volatile and uncertain environment, adapting quickly as conditions have changed, and we're carefully monitoring developments.

Turning to Page 3. With that very brief introduction, let me now take you through the recent market development and Axfood's first quarter performance.

So next page is #4. Market growth amounted to 4.4% during the quarter, a similar level compared to the fourth quarter last year.

Stronger volumes contributed to this development as the annual rate of food price inflation came down and amounted to 1.7% according to Statistics Sweden. Inflation decreased gradually during the quarter and particularly in March when the overall price level was unchanged compared to the prior year.

This was mainly driven by the dairy category, but prices were also lower in several other categories, including fruits and vegetables. In addition to the improved volume trend, a 0.5% positive calendar effect from Easter also contributed to the market development this quarter.

So please go to next slide, #5. As a result of positive volume traffic and high volumes, Axfood retail sales increased 3.8% in the quarter.

This was below the market and also lower than what we had hoped for. Excluding City Gross, where sales have been impacted by recent store closures, growth was in line with the market.

Over a 2-year period, we continue to clearly outperform with contributions from City Gross. Competition remains intense and in general, market dynamics continue to be characterized by a strong focus on price value.

As you all probably know, the VAT on food was halved on April 1 from 12% to 6%, and this measure was implemented just before Easter, which typically is an important holiday for the industry. With this, the overall activity level of the market was particularly high.

In Axfood, we worked intensively during the quarter to prepare for and implemented VAT reduction. Through extensive collaboration and focus on execution throughout the organization from stores and support functions to Dagab and Axfood IT, the price points on millions of items were updated in a very short amount of time.

We are now on Page 6. Consolidated net sales for Axfood grew 2.6% in the quarter.

And as I just mentioned, this was mainly driven by higher volume. We saw growth in all of our segments, except City Gross.

And there, as I just mentioned, it is, of course, important to consider that total growth was impacted by store closures. So please go to the next Page #7.

We report a strong financial development in the quarter. Group operating profit increased to SEK 806 million, and the operating margin was higher at 3.7%.

Operating profit included items affecting comparability of minus SEK 6 million related to City Gross. Last year's items affecting comparability also related to City Gross and then amounted to minus SEK 38 million.

Operating profit and margin on an adjusted basis, which excludes items affecting comparability also increased. Adjusted operating profit was SEK 812 million, and the adjusted operating margin amounted to 3.8%.

The improved profitability was primarily driven by higher sales volumes and growth in both total and like-for-like sales, a stable gross margin, improved efficiency and also an effective cost control. So now let's turn to Willys on Page 8.

Willys continued to demonstrate volume growth in the quarter through an increased number of customer visits and a high ticket -- average ticket value, but total growth was below the rate of the market. Store establishments contributed to growth, although the new stores in the first quarter were established late in March and as such, only contributed to a small extent.

In recent months, Willys has temporarily closed 2 stores ahead of relocation and together with ongoing larger store modernizations, this impacted growth negatively in the first quarter. Earnings grew to SEK 498 million, which corresponded to an operating margin of 4.1%.

The increase in operating profit was primarily driven by the increased sales volumes and a stable gross margin development. Willys is Sweden's leading discounter and 2 days before the VAT reduction, Willys chose to lead the way by reducing prices corresponding to the lower VAT.

This, together with the increased marketing activities, which were largely concentrated to the end of the quarter, negatively impacted sales and profitability. As I mentioned, Willys store expansion progress was also concentrated to the end of the quarter.

Even though the expansion pace remains high and based on the chain's strong position among consumers, there is significant potential to increase the market presence. We are now on Slide 9.

Hemkop displayed a strong performance in the first quarter and clearly increased its market share, delivering retail sales growth of almost 6%. Growth was primarily driven by an increase in customer traffic and in addition, a higher average ticket value that contributed positively.

Like-for-like growth was also strong, contributing to solid earnings performance. With a focus on modernizing stores and enhancing its offering in terms of price value, fresh produce and meal solutions, Hemkop has made excellent progress in recent years.

The current growth clearly demonstrates that customers truly appreciate Hemkop. In total, operating profit increased to SEK 114 million, and the operating margin also increased to 5.1%.

The increase in operating profit was mainly driven by the increased sales volumes, a stable gross margin development and solid cost control. Earnings in the prior year was impacted by new store establishments.

Turning to Page 10. Our efforts to develop City Gross into a long-term competitive hypermarket chain is proceeding according to plan.

City Gross continued to deliver a positive performance in the first quarter with healthy like-for-like growth of 3.6% and a positive earnings trend. Our improvement initiatives to develop the customer offering and streamlining operations are clearly yielding results.

City Gross' loss for the quarter amounted to minus SEK 48 million on an adjusted basis, corresponding to an operating margin of minus 2.4%. This was an improvement compared to the prior year, which came from the positive like-for-like growth effects from structural measures as well as efforts to streamline operations.

Similarly to Willys, City Gross went ahead and reduced prices corresponding to the VAT cut 2 days prior to implementation. And together with increased marketing activities, this negatively impacted sales and profitability.

On a reported basis, the operating loss amounted to minus SEK 54 million, which corresponds to an operating margin of minus 2.7%. This included the items affecting comparability I mentioned, which refers to structural measures for stores.

We are now on Page 11. Growth for Snabbgross amounted to 1% in the quarter with weak sales development for B2B consumers.

The trend in the B2C sales through Snabbgross Club was, however, strong, both in total and like-for-like sales. In terms of the operating profit, Snabbgross managed to offset the weak growth through strict cost control and delivering earnings on par with last year.

In total, operating profit amounted to SEK 25 million, corresponding to an operating margin of 2%. Next, Page #12.

Dagab's first quarter net sales increased by almost 4%, driven by sales to food retail customers and especially Axfood's own concepts. Operating profit also increased to SEK 298 million, and the operating margin was unchanged at 1.5%.

The performance was primarily due to the sales growth and a lower cost level with increased productivity and logistics. Operating profit was, however, negatively impacted by lower gross margin due to market investments.

Late in the quarter, Dagab also negatively was impacted by higher fuel costs and weaker Swedish krona. That concludes the first part of the presentation.

So now it's time for our CFO, Anders, to take you through the financials. And we are now on Page 13, but please go to the next Page #14.

And Anders, please go ahead.

Thank you, Simone. During the first quarter, the cash flow was minus SEK 692 million, which was almost SEK 300 million lower compared to last year.

The strong operational performance was offset by a negative working capital effect due to inventory build ahead of Easter. This resulted in a somewhat weaker cash flow from operating activities of almost SEK 1.1 billion, SEK 129 million lower compared to last year.

The negative cash flow from investment activities of minus SEK 560 million included the initial payment of SEK 185 million for automation in the logistics center in Kungsbacka. Excluding this automation investment, the capital expenditure in the quarter was in line with last year.

By the end of Q1, Axfood utilized approximately SEK 3.1 billion of our credit facilities compared to SEK 3.3 billion in Q1 last year and SEK 2.7 billion as year-end 2025. The cash flow from financing activities of SEK 1.2 billion was in line with last year and included the first dividend payment of just below SEK 1 billion.

We are now on Page 15. The net debt increased compared to year-end 2025 due to dividend payout.

The net debt-to-EBITDA was improved compared to Q1 last year due to a strong EBITDA development despite increased leasehold debt. The equity ratio amounted to 17.3%, which was lower than in December 2025 due to the dividend improved.

The Q1 equity ratio was, however, 0.5 percentage points higher compared to Q1 2025. Total investments, excluding leasehold and acquisitions amounted to SEK 561 million in Q1 compared to SEK 371 million last year.

During the quarter, we established 4 new group-owned stores, 2 more than last year. Our investments in store establishments have therefore increased during Q1 compared to last year.

And as I mentioned before, the investments included the first payment of SEK 185 million connected to automation in the new logistics center in Kungsbacka. And then let's turn to Page 16.

When we look at the capital efficiency, we have a stable development in our rolling 12-month net working capital and also in relation to net sales. Capital employed has increased over the last years, mainly due to the acquisitions of Bergendahls Food and City Gross as well as the investments in Balsta.

The level of capital employed, however, decreased slightly during Q1 as equity was reduced not only by dividend paid, but also the dividend to be paid in Q3 later this year. The effect was partly offset by higher leasehold debt.

Thanks to an improved earnings trend and the reduced capital employed, ROCE improved by 1 percentage points during the first quarter compared to year-end 2025. And by that, Simone, I have come to the end of my presentation and hand over to you again.

Thank you, Anders. And we are now on Page 17, and it's time for me to give you an update on our strategic agenda and priorities.

So let us turn to Page 18. We have a clear house of brand strategy in our group, and this makes us unique in Swedish food retail.

We aim to deliver the strongest customer experiences, and we are present in all segments of the market with our different concepts. Please turn to next Page #19.

To create the right conditions for our retail concepts to be able to succeed on the market, we leverage our strengths as a group and focus on 6 strategic development areas. We have shown you this before, and I would now like to go through some recent key strategic developments.

So please turn to next Page 20. Our ambition is to provide the most attractive assortment on the market with a distinctive offering on branded as well as private label products to meet customers' diverse needs and preferences.

During the first quarter, we had a high pace in developing our private label portfolio and launched more than 100 new products. We had product launches across many categories, but I would like to highlight our focus on expanding range of our international assortment.

In addition, we expanded the Mevolution brand to strengthen our offering in personal care. Our private labels represent quality and innovation, and we also focus a lot on sustainability and health with a wide selection of sustainability labeled and organic products.

In addition, we have a large selection of products with Swedish origin with more than 400 products under the Garant brand. In the space of sustainability and health, we have previously launched several innovative hybrid products.

And this quarter, we launched ready-made meatballs made from a combination of minced meat, vegetables and legumes, an exciting launch that really can contribute to better eating habits, not least among younger people. Our private labels, including the Garant and Eldorado brands are a significant competitive edge.

And with all the new products, we complement our existing portfolio and improve the offerings within our various concepts. So overall, our private label share of sales increased in the quarter and amounted to just over 32%, driven by high penetration in Hemkop and City Gross.

We are now on Page 21. We will continue to develop our attractive store network in the coming years by accelerating the pace of expansion while maintaining a high rate of modernization of existing stores.

This work creates new growth opportunities by ensuring that our concepts provide the best possible store experience for their customers. Willys focuses on significantly expanding its presence, but at the same time, the chain gradually rolls out its most recent store concept, 5.0.

Hemkop is maintaining a high pace in modernizing the stores and in addition, expands its presence when it sees good potential to do so. For City Gross, focus in the past year has been on closing underperforming stores with 1 store closure in the first quarter this year and 1 planned for the second.

This is really about creating a healthy core in City Gross' store base from which the chain can grow from. That said, City Gross has also established a new store recently in February in Norrtalje.

Lastly, to create better conditions for both the restaurant trade and the convenience trade to achieve long-term growth with improved profitability, we have made the decision to bring the 2 operations together into a single organization. The convenience trade business, which is currently part of Dagab, will be transferred to Snabbgross as of January next year.

The logistics operation will, however, remain in Dagab. With consolidation opportunities are being created to further strengthen the customer meetings and offerings, both for restaurants and convenience trade customers.

Moving on to Page 22. We are also improving our competitiveness by maintaining a clear focus on efficiency and productivity.

We are enhancing the way we work, increasing use of data and AI in all our processes. More than 100 AI models have been taken into production in recent years, and we focus a lot on developing and empowering employees through AI tools and training and assistance.

We are also further optimizing our new logistics structure. And during the quarter, we completed the rollout of a new order and purchasing system that will further strengthen our supply chain.

With this new system, we can be more accurate in forecasts and planning and really strengthen how we manage our order flows to balance supply and demand. As previously communicated, we plan to establish a new highly automated logistics center in Kungsbacka that will be completed in 2030 and ensure increased capacity and efficiency for future growth in Southern Sweden.

During the first quarter, work continued according to plan with this project, and we will get back to you when the property lease contract is entered into. Now let's turn to Page 23.

Sustainability is an integral part of our operations and strategies. We aim to be a positive force in society and to take the lead in promoting a sustainable food system by influencing decision-makers, leading the way through own initiatives and driving industry issues.

Last year, we completed the transition to renewable fuels and electricity, both in our own and procured transports, a truly important achievement. And consequently, we have seen a significant decrease in emissions.

Using comparable emissions factors, emission from own transport decreased 15% in the first quarter compared to the prior year. In addition to the increased use of renewable fuels, this reduction was due to a higher number of electrical vehicles and route optimization.

Diversity and inclusion are also areas that are of great importance to us. And by 2030, we aim to be Sweden's most inclusive food company.

During the quarter, we concluded the first work placements under so-called SAO program at Willys and Hemkop. This program aims to help young people in vulnerable areas to strengthen their position in the labor market and motivate them to study.

We have been a part of this initiative since the start, and we will be offering more young people jobs in the future as the program is developed and scaled up. Lastly, I want to highlight our efforts to promote sustainable food consumption.

Hemkop is the leading -- industry leader with regards on organic products and helps customers to shop more sustainably. Recently, an independent survey showed that Hemkop leads the market in terms of promoting organic food through campaigns.

Willys is also doing a lot in this area and came out second in the survey. In a market where price awareness among consumers remains high, campaigns are important.

And I think this really shows that we continue to push forward and take our responsibility. Moving on from our strategic agenda, and we are now on Page 24.

Our outlook for the year is unchanged, and it covers investments, new store establishments and items affecting comparability. With regards to the new establishments, as Anders talked about, in total, we opened up 4 new group-owned stores in the quarter, of which 2 Willys, 1 Hemkop and the new City Gross store I mentioned earlier.

So please now turn to Page 25. And let me sum up.

We summarize a quarter with positive customer traffic, volume growth and increased profitability. We are investing in line with our long-term plan to gain further market share and create the conditions for continued profitable growth.

And that was all for today. So now please turn to Page 26, and I hand over to the operator to open up the line for questions.

Thank you.

I could start off asking about the temporary negative effects on Willys sales growth from major store refurbishment. Can you help quantify in any way the effects here?

Is it correct that it's one store that is closed altogether pending the build of replacing store? And then are there other stores that have a significant amount of store space closed for renovation currently?

No, it is -- as you said, there are some phasing effects, I would say, in the quarter regarding Willys stores. The first thing is that we had a little less new stores and the stores that were opened, opened in the end of the quarter.

However, we will have a high pace as we earlier communicated in establishing new Willys stores this year. And the other thing that you said is that we have closed 2 stores for relocating them.

So they are closed and they will reopen in new places. And then we also have some large modernizations in large stores that's also affecting the like-for-like growth.

So this, in total, have a negative effect in the sales growth in Willys for the quarter.

Great. And these 2 stores that are temporarily closed altogether, have they been closed sort of for the major of the duration of Q1 for the most of that period?

Yes, yes. They closed by the end of the last year for relocating them.

So if these 2 stores would have been in operation, retail sales growth in Willys should have been around 1 percentage point higher. That is fair to assume?

I would say that the phasing in the stores for the Q1, together with that the marketing investment came in the late of the quarter together have a negative effect and make Willys grow a little bit less than we hoped for.

Right. And then I also wanted to ask if there's any way to quantify the cost you have been taking here in terms of having the food VAT 2 days in advance in both Willys and in City Gross.

Any help there to quantify? I mean, should we do 2 divided by 90 and then a little bit more because those were more trading-intensive days times 5.4%?

Or do you think -- could you help us there with any figure...

The reduction of prices that we made both in Willys and in City Gross and Eurocash 2 days in advance had a negative effect and also increased marketing activities in the quarter -- by the end of the quarter together that we had increased personnel cost since it was a lot of manual work of changing millions of prices in stores. And also, we've had IT development costs during the quarter.

And of course, also, as you said, the real effect of reducing the prices.

But is it fair to say also that the sort of short-term top line strengthening effect of this was maybe less than what you had hoped for?

Yes. The purpose of doing that was to strengthen the position for Willys as the leading discounter on a long-term effect and by that leading the price reduction.

But as you said, we didn't really -- we didn't get the volumes as we had hoped for. So the sales for Easter came as it normally does from -- in the middle of the week until -- and by the end of the week.

So we didn't really got the volumes that we had hoped for.

Understood. So sort of subsidizing the ordinary spending, but not being able to push forward the Easter shopping so to say.

Yes. However, I mean, one large purpose for us was to strengthen the position as a leading discounter.

So -- and that is more on a long-term effect regarding the brand. So I mean, Yes.

That was mission accomplished. I understand.

All right. And then final one from me here.

The effects of the war in the Middle East, you mentioned here in the report that the early -- or late into the quarter, the early effects you've seen on fuel costs and then you acknowledge the currency change, the weakening of the Swedish krona. But you have not seen any negative effects on electricity prices.

Is that correct?

We have seen a little bit higher electricity prices, but we work with hedge -- we hedge the prices. So we have a more sort of long-term effect when it comes to electricity.

Right. And then when thinking about possible inflationary effect on food commodities, is it, in your opinion, even if this is more for the farmers maybe, is it fair to assume that the price increase and possible supply squeeze as well of fertilizers, i.e., the urea prices, that, that would mainly have an effect on next year's crops rather than this year's crop season?

It's -- I mean, if you look on the direct effects on the fuel cost, that will have -- it, of course, depends on how the development will be going on forward in the Middle East. Regarding the fertilizers, it also depends a lot on the development going on forward.

This summer's crops, of course, are already done, but then you have the autumn crops and also going for next year. So depending on how the development will be, there will be some delays, but there could be effects also in this autumn since we do -- you have crops not only once a year.

Just coming back to sort of you start out saying that sort of the recent months have brought increased uncertainty, and we can all sort of acknowledge that and that the focus on value for money is still very high. And I hear you when you say that you didn't get the volumes that you expected when it came to the price cuts that you made a couple of days before the 1st of April.

But sort of this uncertainty in itself, wouldn't that sort of have been a tailwind for especially Willys in the quarter since early March that you didn't expect before we went into this conflict in the Middle East? And I was just wondering sort of why are you growing slower than the market?

And I hear you in terms of refurbishments and all that, but you do have more stores now than you had last year. And sort of what is the dynamics?

What sort of happened in the market in Q1, you think? Or is it just sort of these things that you mentioned in terms of refurbishments and closed -- temporary closed stores?

Those -- I'll try to give you an answer. I mean if we look upon the first quarter, as the market as a whole, we had a good growth in the market that was primarily coming from volumes since the inflation was low and also we had deflation in March.

By that, also, as you said, the activity level in the quarter also increased. And in that environment, we also had the phasing of refurbishments going on, closing down 2 stores.

The new stores that we opened up came in late in the quarter, together with the VAT or our price reduction that we made, that together made us go a little bit lower than we had hoped for. So that was all.

And then I would say that the cost levels for the customers, it will, of course, depend a lot on what is happening going forward. I mean the increased fuels came later in the quarter and also -- so I mean, there are many things that is happening for the consumers in the quarter, but also in the market.

However, I would like to zoom out a little bit and say like Willys has a really strong position. It's one of Sweden's strongest food retailer.

They are the most recommended chain. And we will continue to have a high expansion pace for Willys since we see there's a great potential to accelerate our expansions in Willys.

Yes. Okay.

But do you see that sort of these issues that we've talked about now, have they corrected themselves as we go into the second quarter of this year and you had the lowering of the VAT and all that is basically behind us now. Are you seeing a better market on the back of the lowering of the VAT?

Or is that still too early to call?

I think it's too early. There is still uncertainties.

There are -- the VAT and the initiatives to strengthen the consumers' buying power are, of course, positive. On the other hand, also consumers have high prices for electricity and also fuels, how the increased buying power, how large that will, by the end of the day, become and also how the consumers will use their consumption, it's difficult, and it's a little bit too early to say anything actually about that.

Yes. Okay.

And just the last one on the cost for the repricing. Was all that taken in Q1?

Or is there anything taken in Q2, early Q2 for Hemkop?

For Hemkop?

Given that they didn't do the changes 2 days before.

Yes. Do you mean the cost for personnel and marketing and so on?

Exactly. Exactly [indiscernible] repricing.

Yes, that was taken for Hemkop -- all the chains were taking in the first quarter. I mean, both marketing, personnel costs, yes.

Okay. And just the fact that you have to reprice the entire assortment, is that sort of -- is that resulting in a number that you want to share in terms of extra staff to just get that done?

Extra -- could you please...

Staff. Staff.

Extra staff. Okay.

No, we don't give any details about that. But as you say, there were a large cost, of course, for personnel to doing the job and also marketing and also the price reduction by itself.

Erik Sandstedt here with Kepler. Three questions, please.

The first one is a follow-up on one of the earlier questions here. Because you say that gross margins at Willys were stable in the quarter, right?

And given these pre-VAT price reductions, which I assume had a slight negative impact on gross margins. Can you just explain then what sort of supported gross margins to offset that impact?

And given that gross margins were stable and the EBIT margin were down, I suppose OpEx to sales then must have driven that margin contraction. I know it's not a big margin decline, but I'm just trying to understand the underlying drivers a bit better here.

Yes. So the offset was according to, as we said in the report that the marketing investment came in the later part of the quarter.

And that also, on the other hand, had marketing cost and cost of personnel that made the margin a little bit softer.

Yes. But there must have been some positive gross margin impacts as well then if the pre-VAT reductions had a negative impact.

Yes. And that was because that the marketing investment came late in the quarter.

Okay. But marketing, is that -- that's an OpEx, right?

It could be both. It could be marketing costs, but it could also be price reduction campaigns.

Okay. Okay.

You're talking about price campaign. Yes.

Okay. That makes sense.

Perfect. Then secondly, if input costs now go up on the back of the geopolitical tensions, will it be tougher to pass that sort of underlying price inflation on given the price competition we're seeing in the market presently?

I mean increasing costs, of course, there are some, how is it time -- there's a [ lead ] time from when they appear until you can see it in the stores. And you haven't seen them in the stores.

And also that depends on development going on further. But if the development continues with increased costs, you will, of course -- we are a low-margin industry.

And if that will continue, you will see it in the stores also. But it also depends on how the -- yes, how the situation will develop from now.

And also, it's difficult to assess what the long-term effect. But I mean, as we wrote the first -- in the end of the quarter, we saw increased costs for fuels.

And there also the war affects the fertilizers and that also affects I mean, the entire food industry, it could be both animal production, but also from all the crops. So we will see how that will assess the effect in short and long term.

Yes. But maybe to frame it differently, do you see the market being more price competitive now than, let's say, just a few quarters ago or a couple of years ago?

Yes. We've seen a high competition in the market.

I mean, for the last 18 months, there's been a really, really -- or forever, but I mean, the increased competition for the last 2 years, I would say. And that's also why I'm so happy that we can see that the effects we're doing on cost control, also the efficiency that we're seeing coming from the investments that were made both in Balsta and logistics structure, but also now we have implemented a new buying and forecasting system that will also help us to become more efficient.

And also, of course, the help of AI and data helps us to be more efficient and also help improve our customer meetings.

Okay. And then just finally, in terms of joint group costs, they were higher both versus the same period last year as well as versus Q4, but you have done some cost initiatives on that line, I think.

So what drove the costs here? And what's a normalized level going forward?

Yes. As you mentioned, I mean, it can vary from quarter-to-quarter.

We have seen that in the past as well. And now we have, in this quarter, a little bit higher level, and that is due to a couple of projects that we have done in -- for the whole group and that we have taken now.

So a little bit high this quarter. And I would say it's more fair to look at the first quarter last year, if you want to have a decent level of the joint group costs.

Two questions from my side, and sorry if you have to repeat yourself. I came in a bit late in the call.

But first, if you could say anything about the consumer behavior since the VAT reductions. Have you seen any changes to, let's call it, shopping patterns so far?

It's -- yes, it's a little bit early to say that since we have also effects from Easter moving within the month. So it's too early, I would say.

There's still -- there's only a couple of weeks going in with the lower VAT. And also there, as we talked a lot about today, there are other -- there's a turbulent environment around our consumers with the war going on in the Middle East and increased cost for fuels and energy.

So it's too early to say what effects that will have on the consumers. Will the increased buying power, how large will that be?

They are important measures that have been taken with the lowering on the VAT, but how much will that by the end of the day, when the increase of fuels and increase of energy on our consumers have and will they buy more food, will they buy a new sofa or will they save more money? It's really too early actually to say that.

We see that the price value is really important and that the focus on price and price worthiness is important for the consumers. And here, we are really well positioned with Willys, who choose to clarify its position by going 2 days in advance with the price reductions and also City Gross that has strengthened its price worthiness and also Hemkop the last couple of years.

Okay. And second one, if you could say anything about the monthly performance in Willys, did you see January, February being more in line with the market and then somewhat weaker in March?

And where I'm getting at is that historically, we've seen the market leader performing better than the competition during Easter due to, I guess, its locations of its store network and so on.

I would say that the phasing of the stores that they came lately in the quarter and also that we made the price reduction that had an effect. But as we also know, Willys has a really, really strong position, but we have also had natural a little bit extra positive effects during the years of high inflation.

And also last year, in the first 6 months, we had a high inflation. So we got a little bit extra, of course, growth and that when you look upon the comparison figures -- that was difficult to say, comparison figures that also, of course, have an effect in -- if you look on Willys growth for the first quarter.

Just a couple from me. Just the first one, have we seen any changes in your relative price positions since the VAT cut came in?

I mean, have any of your competitors gone and cut prices lower or even less? So has there been any change there?

And has that marketing spend or noise in the market died down since the beginning of April? That's the first one.

Yes. We do not comment our pricing strategies and the price gaps.

For us, it's always important to be clear with the price position, of course, for Willys as the market leader in discounting. And also, it's important for all our chains to have an attractive price position.

I mean -- and since the entire -- the VAT, it was the same for all the -- say, all the actors -- not actors, all the chains in the market. That was -- I mean, that was relatively the same for all the players in the market.

And in terms of marketing spends that you saw yourself were elevated, I guess, the whole market picked up at the end of the quarter. Has that died down as the second quarter started or is it still high?

Could you please repeat? I didn't really understand.

So you pushed marketing spend higher into the end of the quarter behind the new prices. I'm guessing the whole market did as well.

Have you -- firstly, have you pulled your spend back since then? And has the market done the same?

Or has the market pulled back on spend?

We only commented, I mean, the first quarter. And as I said, the entire market had a really high activity level in the -- by the end of the quarter regarding to the Easter, but also for the VAT reduction.

What we did that we also went ahead with the price reduction 2 days in advance for City Gross Willys and also Eurocash. So we made some extra marketing investments due to that.

Okay. And I guess the second question I have is just maybe a bit more theoretical, but I guess Hemkop and City Gross, which would be your higher-priced chains seem to have traded better in the quarter on a like-for-like basis as inflation fell.

Is there any concern that Willys may see a continuation of the kind of underperformance as prices fall further with the VAT reduction?

I would say if we start with Hemkop, Hemkop's result is the result of a job that's been made for many years now in modernizing stores. We've had some really good modernization done in the last month.

Also a job in improving both the price position, but also improving the assortment and focus on meal solution and fresh produce. So Hemkop is the result of a long-term job that's been made, and we're really happy about the performance they made in the quarter.

City Gross is also a result of the job that we made a couple of months -- for a couple of months now since we made the acquisition 1.5 years ago. And so we continue to see a positive growth in City Gross.

Willys still have a really strong position and has been growing for many years, no matter what economy we're in, both in good economies and bad economies. But with that said, also, Willys have had some extra push during the high inflation.

We had high inflation in 2023. And also last year in the first 6 months, we had high inflation.

So I mean, I think, and we see still a high focus on price and price value. I don't think that, that behavior will -- I think that behavior will last.

And in that, Willys has a really, really strong position also going forward. And on top, we have a pretty low discounter share in Sweden.

So there's a great potential to continue to grow Willys.

So by that, I would like to thank you all for joining today and all the questions, and I wish you a good end of the day. Thank you very much.