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May 25, 2012
Swedish grocers' earnings outstrip CEOs
Published: 1 Oct 09 15:28 CET | Double click on a word to get a translation
Online: http://www.thelocal.se/22412/20091001/
The most successful franchisees of the Swedish grocery store chain ICA are coining in more remuneration than many CEOs of large companies listed on the Swedish stock market.
- Guilty verdicts in ICA meat cheat scandal (10 Jun 09)
- ICA merchants could face multi-million kronor fines (14 Feb 08)
- ICA tops satisfaction survey (10 Dec 07)
The ten most profitable ICA franchises enable their owners to extract more than 130 million kronor ($19 million) in dividends in 2008 - in addition to their salaries.
Leading the pack of wealthy grocers is Rolf Karlsson who is the owner/CEO of ICA Maxi in Gothenburg, DN reports. Karlsson claimed a dividend of 37 million kronor on top of his 1.6 million income in 2008.
Clothing retail giant H&M head Rolf Eriksen by comparison had to make do with only 17 million kronor, including bonus, while Volvo Trucks CEO Leif Johansson took home a mere 15 million kronor.
Rolf Eriksson's remuneration is reported to be 125 times that of a cashier employed in his store and comes despite the economic downturn.
"People have to eat. Maybe you cut back on foreign travel and save on restaurant visits which means that more food is bought. This can be one effect," Madelene Gummesson at ICA explained to the newspaper.
But the weak state of competition within the sector and lazy consumers are also cited as reasons for the booming profits at the grocery giant.
Gummesson points out however that the firm has cut prices on key goods on several occasions in the past year and argues that the improvements in profits and margin are due to increasing turnover and the reduction of logistical and administration costs.
What do you think? Leave your comment below.
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Your comments about this article:
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I like ICA because its always clean. I do think they are a bit expensive and can cut the prices a bit. But that is only where I live. I hear that other ICA's in other areas are a bit cheaper.
But Willies is the cheapest. but they are the most unorganized store. At least the ones I go to.
Gotta stop trying to kill the golden geese.
Second in the Stockholm area there are too many alternatives to mention. (City gross, Coop, Vi, Hemköp, etc etc)
When we decide to go to ICA it is because we are looking for something special that is not available in other stores and because we are willing to pay the price for that product.
ICA is not cheap, but provides value-add through its variety in products.
like seriously what does a person do with 37 million sek in a year??
A multinational retail conglomerate, ideally transfer-pricing its earnings to Carribean tax havens? Or a privately-owned discounter chain like Germany's Lidl, famous for spying on its employees, suppressing unionization and "deliberately poisoning discarded food in a bid to keep homeless people at bay" (TheLocal, 13 November 2008)?
With these alternative options in mind, I'd be very happy to see many successful franchisees, including that handful of millionaires among them. In contrast to those Bertil Hults (EF Education, Switzerland) and Ingvar Kamprads (Ikea, Netherlands Antilles), I assume they build their luxury houses in the community where their wealth originates.
To me, ICA stores are the epitome of unprofessionalism and old-fashionedness, and many remind me more than a little of supermarkets in the UK in the 1980s.
It seems particularly strange when one sets ICA alongside other Swedish retailers - both global players like IKEA and H&M, and more local players like Stadium and the various telcos. All of them run extremely slick retail operations with consistent branding, in-store 'feel', terms and conditions of sale, and so on.
What is even more strange is that, if you look at Albert Heijn, Royal Ahold's supermarket chain in the Netherlands, it is like night and day compared to ICA -professionally-run, slick stores that give Tesco and Carrefour a run for their money.
The competition authorities should split up the ICA monopoly, and soon.