Norgesgruppen's Annual and Sustainability Report 2020 Contents This Is Norgesgruppen Our Business Areas Highlights from 2020 Our Results
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NORGESGRUPPEN’S ANNUAL AND SUSTAINABILITY REPORT 2020 CONTENTS THIS IS NORGESGRUPPEN OUR BUSINESS AREAS HIGHLIGHTS FROM 2020 OUR RESULTS 2020 – A year like no other A steady course in Contents k Securing deliveries of food - to all parts of the a demanding year country - was the number one priority when the Lockdown, failure of the catering market, pandemic broke out. k uncertainty and record sales. Read more about how we managed the 2020 – a The CEO summarises this year of contrasts and year like no other – on page 6. looks ahead to the future on page 8. Price cuts amounting Less waste to millions of NOK and less sugar k Four major price cuts at KIWI in 2020. k In five years, we have reduced our food waste by 38 per cent and cut 4,000 tonnes of sugar. Read more about how KIWI customers saved money on page 35. We explain how we have done it on pages 47 and 48. Investing for the future More wonderful people at k In 2020, we continued to invest in new our stores environmental and technological solutions. k We welcomed 3,000 more employees in 2020. Read more about the forthcoming electrified sea Read more about how the pandemic introduced route to the new Sande warehouse and about the more people to the possibilities of the grocery state-of-the-art Vestby coffee roastery on pages 60 sector on page 52. and 61. This is NorgesGruppen Our business areas Highlights from 2020 Our results 4 NorgesGruppen in brief 23 Retail 32 Our customers 65 Annual report 5 Secure food supply and positive ripple 26 Wholesale 45 Cooperation 75 Board of Directors of NorgesGruppen ASA effects 27 Brand 51 People 77 Summary of financial statements for the 6 2020 - A year like no other 28 Properties 57 Society Parent Company (NGAAP) 8 Message from the CEO 28 Convenience market 88 Sustainability performance 10 Performance in 2020 29 Affiliated companies 91 ESG index 14 Our contribution 92 What sustainability choices our customers care about 18 Risk management and risk development 2020 93 Our sustainability results 20 Market and trends CONTENTS THIS IS NORGESGRUPPEN OUR BUSINESS AREAS HIGHLIGHTS FROM 2020 OUR RESULTS THIS IS NORGESGRUPPEN 3 NORGESGRUPPEN'S ANNUAL AND SUSTAINABILITY REPORT 2020 CONTENTS THIS IS NORGESGRUPPEN OUR BUSINESS AREAS HIGHLIGHTS FROM 2020 OUR RESULTS NorgesGruppen in brief NorgesGruppen is a grocery retail company serving the whole of Norway. Every day, our employees and chains work to provide customers with great shopping experiences, making food more affordable, and inspire sustainabile and healthy choices. Our goal is to make your everyday life easier and contribute to a sustainable future. 2020 in brief 1,820 3.8 grocery stores BNOK in annual profit excl. IFRS 16 52% 3.7 retailer-owned stores BNOK in investments 1.2 101.6 million customer visits BNOK in operating every day revenues excl. IFRS 16 43,800 k An efficient employees nationwide value chain 4 NORGESGRUPPEN'S ANNUAL AND SUSTAINABILITY REPORT 2020 CONTENTS THIS IS NORGESGRUPPEN OUR BUSINESS AREAS HIGHLIGHTS FROM 2020 OUR RESULTS Secure food supply 25,000 and positive ripple effects products in our range NorgesGruppen competes in the food market, and is committed to being a secure supplier of food through 1,200 sales outlets all over Norway. In 2020, the Covid-19 pandemic put the entire food value chain to the test. business partners The system proved to be robust and well-functioning, even in exceptional circumstances. With low discount chains, supermarkets, convenience stores and food-on-the-go, we give customers freedom of choice and shopping experiences. The chains offer physical stores and online shopping from independent retailers and proprietary stores throughout the country. We cover the value chain with food production, 116% purchasing, distribution and stores. This ensures competitive prices and a wide selection of products for increase in MENY online sales the customers, as well as providing the retailers with a solid foundation on which to operate their stores. NorgesGruppen has 1,200 partners, ranging from large brand suppliers to small- The products k Our chains and concepts people want scale producers of locally produced food. The diversity of our suppliers means that we can offer something for everyone. Our own brands by UNIL, Joh. Johannson Kaffe, Matbørsen and Bakehuset make the product range in our stores unique. Efficient delivery k The wholesale business ASKO operates an efficient value chain based on a nation- wide distribution network and advanced logistics and warehouse solutions. ASKO nationwide serves all our stores, 14,000 customers in the catering market and a number of inde- pendent grocery operators. Automated ordering routines and frequent deliveries ensure that store shelves are full of products with a longer shelf life. k NorgesGruppen has stores for all needs and has a presence in 89 per cent of the Stores where country’s municipalities. We have the discount chain KIWI, the supermarket chains people live MENY and SPAR, the local store chains Joker and Nærbutikken and a number of kiosks and restaurants in the catering segment. More than half of the stores are owned by independent retailers. 5 NORGESGRUPPEN'S ANNUAL AND SUSTAINABILITY REPORT 2020 CONTENTS THIS IS NORGESGRUPPEN OUR BUSINESS AREAS HIGHLIGHTS FROM 2020 OUR RESULTS 2020 – a year like no other NorgesGruppen has a presence in nine out of ten Norwegian municipalities. As a major retailer in Norway, we are responsible for maintaining food supplies throughout the country. This has been our number one priority throughout 2020 - a year like no other - when the coronavirus pandemic changed the world. k 2020 was a demanding year, marked by con- important part of this, NorgesGruppen decided Safe stores and workplaces siderable uncertainty. The Covid-19 outbreak early on that no wholly-owned companies Good infection prevention and control has been and subsequent lockdown of society changed should apply for financial support from the a top priority in all NorgesGruppen’s outlets. Sig- shopping patterns overnight. This resulted in a authorities. nificant investments have been made in a range major sales increase for grocery stores, as well of measures to ensure the safety for shoppers as a significant reduction in sales in the conve- Good cooperation in the industry and employees. These include hygiene measures, nience market and, in particular, the catering Cooperation with suppliers and Norwegian agri- shielding and distance marking to maintain dis- sector. Around half of the increase in grocery culture has played an important role in securing tance requirements as laid down by the govern- sales is due to closed borders, especially in the food for customers. NorgesGruppen has main- ment. NorgesGruppen has also introduced limits regions along the Swedish border. tained efficient access to goods, even during to the number of customers allowed in the small- periods of panic buying. From day one, our est stores at any one time. In addition, the chains Delivery to the front line suppliers have done their utmost to adapt to a introduced their own opening hours for partic- The unpredictable supply situation required challenging and unpredictable situation. Norges- ularly vulnerable customer groups in certain early investment in measures to maintain Gruppen’s chains have been in close dialogue stores. NorgesGruppen’s employees have been food supply across the country. Warehouse with the retailers throughout the period in order able to adapt quickly to the new measures, both staff, drivers and store staff have all been at to assist. For fruit, berry and vegetable farmers, from the government and the company’s own the forefront of food delivery. A consider- it was a demanding year with challenges in emergency response unit. In 2020, their absence able effort was made to maintain the level of accessing foreign seasonal workers and a drop due to due to illness was not significantly higher service so that sold-out situations could be in sales to customers in the catering industry. than that of previous years. We expect to put avoided. In order to reduce the number of lay- NorgesGruppen therefore ensured that it would the new routines and experiences from 2020 to offs, NorgesGruppen has moved resources from purchase fruit and vegetables from Norwegian good use in the next phase of the pandemic. We catering and convenience to online shopping producers, giving suppliers much needed pre- need to live up to our social mission every single and groceries. Companies in the Group that dictability at a demanding time. day - before, during and after a pandemic. Stores were under less pressure were able to assist throughout the country must have sufficient pro- wherever there was more pressure. As an vision of food products. 6 NORGESGRUPPEN'S ANNUAL AND SUSTAINABILITY REPORT 2020 12. mars 26. oktober 31. oktober 27. desember WHO erklærer pandemi Nye nasjonale Nye tiltak for å stoppe Første vaksine satt i og Norge stenger ned 7. august innstramminger smitte i hjemmet Norge. Samme dag ble Bremser videre 5. november første virusmutasjon påvist her i landet. 28. februar 19. mars 30. april 25. juni gjenåpning etter økte «Hold dere hjemme, ha Første smittetil- Innfører Anbefalt avstand Åpning for reiser smittetall minst mulig sosial kontakt» felle påvist i hytteforbud reduseres fra 2 til 1 mellom Norge og Norge (oppheves 21. meter Europa 2. desember april) 17. mai Innfører smitte- Nasjonaldagen feires verntiltak i julen CONTENTS THIS IS NORGESGRUPPEN OUR BUSINESS AREAS HIGHLIGHTS FROM 2020 OUR RESULTS uten barnetog