Rødt and SV come out against the billion grocery giant’s earnings. CEO Ronar Holweck responds that he has a responsibility to operate profitably.
– This is money earned at unreasonably high prices for most people, says SV Vice President Torgir King Felixis.
He met the 2022 results of owner Kiwi and Norgesgruppen.
Conclusion: almost unchanged turnover from 2021, but a billion less profit. The group was left with NOK 2.9 billion after taxes.
Marie Sniff Martinussen, Rødt Deputy Leader, votes in:
Norgesgruppen can spare us their tears about profits not being as great as last year. Grocery stores have made huge profits during Corona. The fact that the score is below standard, she says, does not mean that they are earning a poor profit.
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Despite a demanding year with sky-high cost increases, 2022 wasn’t a crisis year for the nation’s largest trading house. It was one percentage point lower marginsmarginsIt shows how much income the company has left at the end. Hence it is a measure of profitability. .
CEO Runar Hollevik is very happy about that.
– We are glad that the country has landed with both feet on the ground. We cut some costs that were very explosive, including energy. We’ve reduced that by 10 percent.
– So I would say we run risky sports with a profit margin of 2.8 percent when we have more than 100 billion in turnover.
– There are very small margins, so we need very little before we throw it away. There are parts of the business that have had a very challenging year, but fortunately we are diverse. So in general it was usable.
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You need three percent
– Norgesgruppen often reports that they have low margins per item. But the results show that margins aren’t everything in this market. Size is very important. When we see food prices rise in Norway, Norgesgruppen’s profits show they are very high, says Fylkesnes from SV.
For healthy operations, the profit margin should be around three percent, Holivek replies.
– I believe we have a huge responsibility to operate profitably over time. Because if we operate profitably, we can invest in more efficient operations, and that’s important for lowering food prices.
– So profitability is a prerequisite for us to be able to secure jobs for more than 40,000 employees and to be able to reduce food prices.
At the same time, the Norwegians are aware that there will be a debate about their position and about the food value chain, says Holweck. But he doesn’t have much to spare in parts of the debate. That’s why the grocery store responded earlier this year.
– Exchanging words about “where the money goes” also affects our staff in the stores. They notice this on their own body, through the anger of the customer. I don’t think politicians should contribute to that in troubled times.
The chief economist believes that the price war in the grocery industry has “reduced pressure” on the Bank of Norway
Of the 2.9 percent left in the group after Norgesgruppen has paid for goods, wages, taxes, electricity and everything else, a dividend equivalent to 0.7 percent of the group’s income is proposed.
Less than three-quarters of that 740 million goes to the Johansson family. Chief Johansson accordingly capital Fourth richest person in the country.
“It’s quite catastrophic that so much of the extra spending of ordinary people on food ends up directly in Kiwi Johansson’s pocket,” Martinussen says in Ruddite.
– Is it true that the Johansson family should pay more than half a billion dividends for last year, Holivek?
– I repeat that for Norgesgruppen it is important for efficient operations that we operate profitably. We use the main part of what we earn to reinvest in the business.
– So I think we have long-term owners who prioritize using the vast majority of the money we earn to reinvest in the business, so we can operate more efficiently.
Price war on food: The researcher believes that the “kiwi effect” is exaggerated
Willing to stay at lower prices
The Norgesgruppen director says 2023 will include hard work to further reduce the group’s costs.
– Rising costs leading to increased prices and lower purchasing power is not good for a business house like Norgesgruppen in the long run.
This year, the low-cost chain Kiwi got a lot of attention for not raising prices on February 1st, something competitors felt compelled to respond to.
– For now, we are ready to stand by her. We have to live with the fact that we are thinning margins.
Holivek says the chains follow an independent pricing policy, and keeping prices stable was a decision Kiwi made on its own.
– It’s also something they deal with themselves. They have to fund that either through customer growth, or by operating more efficiently. Because there is no doubt that a shirt costs money.
– Are the Kiwis making money now?
– It is not appropriate to comment on it, because this is an investment. What is important is that they have a responsibility to offer profitable operations in order to secure a workplace for their employees. And that is their focus for the rest of the year.
– Surely it is important for the kiwi to make money after taking such a drastic step?
– They hope to get it back by further customer growth. And by driving customer growth, you get a higher top line, and then you can also operate more efficiently. So you can definitely work profitably even if you get stricter about pricing.
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