Axfood targets 2026 profitability for its City Gross chain

Swedish food retailer Axfood said Thursday it expects its recently acquired hypermarket chain, City Gross, to become profitable at some point during the second half of 2026.

The target, announced at the company's Capital Markets Day, is a key goal for the chain which Axfood fully acquired in November 2024 to gain a presence in the hypermarket segment.

Axfood said several improvement initiatives are underway to reach the goal and then gradually strengthen profitability.

The company also reaffirmed its group financial targets, including a long-term operating margin of at least 4.5 percent.

Axfood acknowledged that recent spending on logistics, acquisitions, and pricing initiatives has kept its margin below that target.

However, the company said investments in its base operations, along with the development of its store chains, are expected to create favorable conditions for increased profitability over time.

"Axfood has a fantastic business model and Group structure that creates opportunities and competitive advantages," President and CEO Simone Margulies said in a statement.

"I am convinced that we are well positioned to strengthen our competitiveness and continue challenging and growing in the coming years."

The retailer also outlined expansion plans for its Willys discount chain, with an ambition to open at least 10 new stores per year, and noted its new automated logistics center in Bålsta is now fully operational.