Danish Dagrofa with historic results
Danish and half Norwegian-owned Dagrofa came out in 2023 with DKK 426 million in operating earnings, which is the best result for the food group in more than 20 years, many of them with solid deficits.
The result contributes to a profit after tax of DKK 89 million, which is an increase of more than 20 percent compared to the previous year.
"We are once again creating growth in Dagrofa and holding on to the progress of recent years with an annual result that is far better than last year in a highly competitive market," says Tomas Pietrangeli, CEO of Dagrofa.
"In 2023 we have strengthened our position in the market, we have won market shares and strongly improved our profitability. Of course, we are excited. In January this year, MENY was voted 'Supermarket of the Year' by B. T.[i] Denmark's 12 largest supermarkets took part in the vote, and the result is confirming that customers like what we stand for," concludes Pietrangeli.
Former CEO of NorgesGruppen, Sverre Leiro, often stressed that top line growth is “the most important parameter” in our industry. Dagrofa's figures illustrate why: Even a fairly modest growth in turnover (3,4%) can have a positive impact on the bottom line (20%).[ii]
Challenging market conditions
2024 will be another year of challenging market conditions. Several grocery chains are opening new stores that continue to focus heavily on price, while costs are increasing. But Dagrofa is strongly positioned for the future, according to top brass.
Paradoxically, it is Rema 1000 that is a main challenger for Dagrofa in today's Danish market. The development of Rema 1000 in Denmark is impressive.[iii] An interesting case we will come back on at a later stage.
“What does joint ownership with NorgesGruppen mean for Dagrofa,” NHH asks.
"For us, NorgesGruppen is just the right partner. First, we look a lot alike. This means that we can share knowledge. We get inspiration from NorgesGruppen and they get inspiration from us. The latest example of knowledge sharing is that at the beginning of this year, we introduced Danske Foodskatte in MENY. We have done this with inspiration from Norske Matskatter in MENY Norge," says CEO Tomas Pietrangeli to NHH. "At Dagrofa, we have made progress every year for the past six years. It has also happened with NorgesGruppen behind us, and all our owners have made it possible for us to work with an offensive strategy that has produced results," he concludes.
Norgesgruppen with a long-term perspective
NorgesGruppen is well satisfied with the investment in Dagrofa and with the development in recent years, writes communications manager Kine Søyland in an email to NHH.
However, it will take many years before the Norwegians get a payback on their investment of 500 million NOK in Denmark - dating back to 2013. Kiwi Denmark was not successful and a profit of DKK 89 million is after all limited compared to accumulated costs.
On the other hand, NorgesGruppen has a very solid balance sheet and very patient owners who have the time and backbone to wait.
Key figures 2023
EBITDA: DKK 426 million the highest in more than 20 years
Profit: DKK 89 million an improvement of 20 percent compared to 2022.
Revenue: DKK 19.4 billion. Improvement of 3,4 percent compared to 2022.
With over 520 grocery stores spread across Denmark. Dagrofa is behind the grocery stores MENY, SPAR, Min Købmand and Let-Køb. Included too are Dagrofa Logistik and Dagrofa Foodservice.
Sources: Dagrofa, B.T., Børsen,