Axfood

Introduction: When Deflation Becomes a Problem

The second quarter of 2026 was a disappointing period for Swedish grocery retailer Axfood AXFOF ... . The company reported revenue of SEK 23.2 billion SEKUSD ... , an increase of 0.9% compared with the previous year, but below analysts’ expectations. Operating profit also fell short of forecasts, reaching SEK 964 million.

The main reason was food price deflation, which put pressure on the company’s growth. While many businesses struggle with inflation, Axfood has encountered the opposite problem: falling food prices are reducing revenue and profit margins. Calendar effects also played a role, creating additional pressure.

However, the situation is not entirely negative. The Hemköp supermarket chain recorded growth of 7.4% and increased its market share. The company also reaffirmed its intention to bring the City Gross chain to profitability in the second half of 2026. In this article, we will examine the key factors affecting Axfood, assess its prospects, and explore how the company plans to address these challenges.

Financial Performance: Disappointing Figures

Revenue Below Forecasts

Axfood’s revenue for the second quarter amounted to SEK 23.2 billion, representing an increase of 0.9% compared with the previous year. However, analysts had expected SEK 23.67 billion, and the SEK 470 million shortfall was a significant disappointment.

Revenue growth of only 0.9% is minimal and indicates that the company is experiencing difficulties in expanding its sales.

Operating Profit Falls Short of Expectations

Operating profit amounted to SEK 964 million, below the analysts’ forecast of SEK 1.008 billion. The EBIT margin stood at 4.20%, which was also lower than expected.

The decline in operating profit reflects pressure from deflation and rising costs.

Net Profit and Earnings per Share

Net profit for the quarter amounted to SEK 647 million, while adjusted earnings per share came to SEK 2.94. Both figures...