Sweden Bergendahls Restructures Food Division
Sweden’s fourth largest grocer Bergendahls has split its food subsidiary into four divisions: City Gross Store (Hypermarkets), City Gross E-commerce, Assortment and Wholesale. As a consequence, Group CEO Peter Lund, while retaining his current position, has also taken over the role as CEO for Bergendahls Food. Former CEO Johan Johnson becomes Division Director for Wholesale.
Each division will have its own independent management group and supporting functions such as Finance/Controlling and HR. Peter Lund said the new organization will allow the retailer to become more agile and cost effective, which will be necessary for continued expansion within both retail and wholesale.
Daniel Johansson (Retail Analyst)
Opinion Gear Change from Small to Medium
This new organisational change is a consequence of Bergendahls' steady growth journey in recent years. Bergendahls is now simply too big to centralise all decisions within one unit. Considering its aggressive expansion plans it seems wise to further empower these functions by giving them their own divisions. The retailer has secured plots for another seven hypermarkets, to be opened 2018-2019.
Putting the assortment responsibility into a separate division underlines the retailer’s ambition to realise synergies between the assortment sold at its wholesale customers, its own City Gross hypermarkets and online. Private label will likely play an important role here, an area in which it has trailed behind the competition due to a late start. At the same time, helping regional suppliers expand to new areas will continue to be an important part of the retailer’s differentiation strategy.
Grocery e-commerce has become an increasingly important channel for the retailer and it has expanded its prepacked grocery bag proposition to also offer a bulk option this year. LZ Retailytics numbers show that Bergendahls Matkasse’s turnover almost tripled to SEK381mn (EUR40mn) in 2016. This keeps it in line or even ahead of the other much larger traditional grocers in the field, which shows the retailer’s ambitions in the channel and the need to set up a dedicated online division.