Good morning, everyone. It's a true pleasure to see so many people actually present at today's event, so a special welcome to you. To the rest of the audience which are watching online, welcome to you, even if you're watching right now or if you are tuning in to the webcast later on. It's been four years since Europris went on stage for a Capital Markets Update, we have to admit a lot has happened since then, both for the company but also in the retail sector in general. Of course, COVID-19 obviously boosted volume and demand in the retail sector, but it also created some difficulties with shortage of production capacity and also putting pressure on freight costs from Far East. Of course, this year, we see that consumers are concerned with the...
They see that the higher inflation and also high interest rates are putting pressure on their disposable income. With that backdrop, I have to admit that I'm really pleased with the development of Europris since our last Capital Markets Day four years ago. Going forward, I've called my presentation From Good to Great. Before I jump into those details, I would like to briefly take you through the agenda of the day. After my first presentation of the Europris Group and the present situation, I will let Andreas Skalleberg join me on stage. He's the CEO of Lekekassen, which we acquired 67% of from in the summer of last year.
He will be followed by Vice President, Strategy and Sustainability, Renate Spernes, who will talk more about our pure- play concepts, the digital customer, the customer club, and also the sustainability agenda and how Europris will work more locally. After a short break, CFO Stina Byre will take you through the financials before we conclude the formal part with a brief summary and the Q&A session. The web audience, please feel free to send in questions as we speak, and we will take all the questions from the audience here in the room after the presentations. We are lucky to have some external guests here today. We have Jeroen van Dorp from Goldman Sachs, who will give the international perspectives on variety retail.
After that, we will have a so-called Fireside Chat, or in Norwegian, Paneldebatt, which will be managed by Petter Nystrøm from ABG and Ole Martin Westgaard from DNB. We, in the panel, have Harald Jackwitz Andersen from Virke. We have Britt Otterdal Myrset from Deloitte, and we have Derya Incedursun from Nordea. I think that will be an interesting part where we discuss the developments in the retail sector, but also the overall consumers and their behavior during this actually quite difficult period. That debate will be held in Norwegian language and will not be part of the webcast. Going From Good to Great. I actually think we should start by defining what good looks like.
Looking at Europris, we are a clear market leader in the discount variety retail segment in Norway. We are the number one. We have a very strong brand with increasingly positive customer feedback. We are viewed as the price leaders in the market, and we have a very powerful marketing and campaign engine to drive traffic to the stores. We also use category upgrades and destination categories and the assortment to drive traffic, and we have a very well-proven category management model to create growth and increase satisfaction of the customers in the stores. Finally, of course, we have physical stores. We have a unique network of 276 stores across all Norway. A clear market position defined that is important. The more important is that actually the customers come to our stores.
Over the past years, we have built a customer club. That customer club was not established when we had our last Capital Markets Update in 2018. Over the past three, four years, we've actually built a club with more than 1.2 million members. Of course, these customers are important to us because on average, they have a much higher shopping frequency than the rest of the customers, and they have a higher basket value. That is important. You know, equally important is that we actually know these customers. We know where they live, we know their shopping history, we know their age, we know their gender. All this data, that gives us an opportunity to start to communicate with these customers more and more frequent, but also we can be more personalized in our offerings.
That journey has started. Renate will talk more about this opportunity later today. That's an important asset of Europris going forward, the membership club, and also the information we have on these customers. The digital part is important, but still, the power of this leaflet is never going to die. Well, of course, at one point it will, but it still lasts, and it still works. This is the most important marketing tool we have in Europris, and it's distributed to almost one million households every week. Prices on this front page should be unbeatable. Our customers, they know it. You don't fool the Europris customers. They are price conscious. When you ask consumers, they say that Europris is the place where you can find the bargain.
We've carried out the brand tracker survey, the same survey for almost 16 years. Once again, this year, Europris comes out on top when we ask the consumers, where do you think you can make a bargain? Unlike many other retailers, we actually really wanna sell these products. We don't hide them away. They should be easy to find in the stores, and we should actually never sell out. Every week, we measure each sales point on this front page, sales per customer per store. We actually get quite upset if we sell out or if we see big differences in sales per customer across the chain.
This is an extremely tight follow-up from our side and extremely important tool for us because this is the reason to go, and if you come to the store to get these products, you should find them. Sales from this front page has actually increased over the past years. That is, of course, because we have put more focus on it. We wanna sell these products, and we actually do sell these products. Now, a total of 13%-15% of total sales come from this front page alone. Another 15%-17% comes from the rest of the pages in the leaflet. This is actually a very good proof that these campaigns, they work, and they drive traffic to the stores, and they also they increase shopping frequency.
When we ask the customers, "Where have you shopped in the last in the last month?" Europris comes out on top. We are the chain that the customers have been most likely to visit over the past month. Of course, customers, they also recognize the price leadership position we have taken. They place us on top when they ask who has, in general, the lowest prices. Europris comes out on top again. The low price concept is, of course, very important in today's economy. We see that consumers have pressure on their disposable income. The market is getting tougher, then being in the low price position, being in the discount sector is a very nice spot in the market to be.
During this year, we have actually sharpened the focus even more on the front page and on the marketing campaign towards more consumables. We see that that is what's selling the most. We use this leaflet to drive traffic to stores. We use these offers. We tweak what we put on the front page to drive traffic because we know as soon as the customers are in the stores, they will buy what they need at low prices to their homes. Another important traffic driver is, of course, the season we're in at the moment. You know, it's the Christmas season. Europris is clearly the champions of the seasons in Norwegian retail. It's an important traffic driver for us. We put a lot of effort into arranging the stores according to the different seasons.
If it's for Christmas, if it's for the summer season, if it's for Easter or Halloween, you should really get that feeling in the stores. Each store has a dedicated sales area for the seasonal articles, both inside the store and of course, where we can, also outside the store, and especially for large seasons like Christmas. These days, you should really have the Christmas feeling long before you enter the store, actually. You should see the lights, everything before you come. Creating this is extremely important for us to drive traffic, and we are recognized by the customers as the chain with the best seasonal assortment in Norway. Our efforts, they pay off, and the customers, they see it. Having campaigns, having a strong front page, having good seasons is not alone.
We also need a broad assortment of products. We have a variety of assortment, and that is extremely important for us to drive traffic as well. You should find everything you need for your home at Europris. Overall, you see now that consumables account for around 50% of total sales in the chain, while specialty retail and general merchandise split the remainder pretty evenly. We're not going to share, you know, the margin on sales for each of these subcategories, but to give you the broad idea, we have indicated the gross margin level for each of the three key groups. As I said, we see now in the market that the consumers are actually behaving a little bit differently than what they did in the past.
That is especially recognized when we look at sales for the various articles we have. We see now sales are holding up for low-priced consumables in the market, and we see that sales points below NOK 200, which accounts for 84% of total sales in the chain for the last 12 months, that has increased by 1.4 percentage points so far this year per November. Low price is selling. Consumables are selling. The medium price points from NOK 200-NOK 1,000, we see that has declined by 0.7% year to date, and that accounts for 13% of our total sales. When we look at articles priced more than NOK 1,000, we see a decline in sales of 23% year to date. That is a significant change.
We started to see this already before the summer, that consumers were spending their money differently. They were holding back on investments, purchases. We also see that they are trending down. We've seen also a small increase in the private label share. The consumers are changing their behavior during this economic situation. Of course, that market will come back. It's not like we have stopped buying garden furniture and Christmas trees for forever. If it will take one season or two seasons, I don't know. That market is coming back. Compared to the situation we had a year ago, the market is much tougher this year than it was last year.
But also when we look at these high price tag items, it accounts for a rather small share of our total sales, but it's an important indicator that we see that the consumers are behaving differently. Of course, we have adapted. That's why we put more focus on the consumables on the front page, because that's what the consumers want at the moment. I mentioned very quickly the private label share a couple of minutes ago. The growth in private label has continued. Since the last Capital Markets Update, we have actually grown the share of private label sales or total sales from 35%-40%. That has been done in a growing market.
That development, of course, also adds to not only the sales growth, but it's also a very positive contributor to the overall gross margin of the company. I think it's strong that we have been able to implement new private labels. We have added also sustainable private label products in our portfolio, that is making it very attractive for the consumers, and especially in today's environment, where we see that the consumers are willing to trade down in order to get more value for money. I think if we try to sum up these first slides, you know, showing the customer impressions of Europris, I think I view Europris as a campaign-driven, low-price retailer with a broad assortment. That is exactly how the customers view us.
If we look at the word cloud summarizing, you know, the impressions the customers have with the Europris brand, you will see billig, or cheap in English, as well as low prices, varied assortment and large selection. That's all what we wanna be. If you compare that to the word cloud we had in 2015, you would see, you know, of course, still billig and the varied assortment, but you also saw low quality and messy stores. I'm extremely happy that, you know, that our core strengths are, you know, being even stronger this year, but seeing also that the negative comments from the customers are becoming less of an issue, that is also very, very important.
I think that is a very strong testament to the stores that we have been able to develop and lift the quality level in the chain. If we turn to the store network, we have continued to expand the network over time. We have added the new stores, and we also invested into modernizations, relocations, and upgrades of the store base. In fact, I think in total, we have upgraded, relocated, modernized, or opened a total of 86 stores since the December turn, since 2019 until this day. That's a quite significant number in terms of the 276 stores we have. We are still investing into the store base. The average store size is now around 1,200 square meters .
We also see that the revenue per store has increased significantly over the past years. It's now NOK 32 million in 2021. That show that we have excess capacity to take on additional sales in the chain. I still believe that we have a capacity to take on more sales in the current store network. We can continue to grow like for like with the current stores we have. If we look at profitability, we have managed to raise the performance on all stores over the past years. All our stores were profitable last year. We see that the EBITDA margin per store has increased significantly over the past years. Of course, that is due to scale benefits.
We've seen that revenues has increased sharply. That gives us, of course, a better EBITDA margin as well. I also like to think we see that we have had the biggest increase in the lowest performing stores. I think that is a testament to good retail craftsmanship. We have done a lot of work on how we have our processes right in order to get things done the right way. Over the past years, during COVID, actually, the management started off by when the Norway closed down, and we couldn't have a lot of meetings, we actually started having internal meetings working on the rules of business in Europris. We have actually been through all the working processes we have internally.
We have mapped them, we have fixed the bugs we had, making sure that we are working smarter than before. We are simply just doing less mistakes than we used to. Of course, if you look back, you know, you always do some mistakes. Still we do some mistakes, we learn from them, and that's a good thing. Mapping all the processes we have means that we take out waste in the processes. We do less mistakes. Of course, if you do a mistake at Europris head office and you send it out to the stores, you suddenly have 276 mistakes. That's quite hard to manage.
By doing less mistakes, you know, doing things right before you implement and send it out, you actually create a lot of capacity out in the stores to work on sales and customer service. That's what we've done. We've not done this to save costs necessarily. We've done this to reinvest that into customer service and experience and sales in the stores. Of course, you also save some costs because you get more capacity at the head office as well, because they do not spend all the time fixing mistakes. Now we see products are there at the right time, in the right amount, and they're being presented in the right way in the store. I think that generates both higher sales and also profitability.
This is actually one of the slides that I'm most proud of, and it shows the development perceived by our customers and how they actually feel welcome in our stores. We see that this year's score in the customer service is the single most best positive development we've had. It's the all-time high score for almost all parameters, from hygienic stores, which is of course good that, you know, the customers perceive us as hygienic, especially after COVID-19, where we worked extremely hard on this. It's recognized by the customers. The stores are more appealing, it's well arranged, it's tidy, friendly staff, and inspiring. We're making progress on all areas when it comes to the store impression. This picture is from the store at Nittedal, which we opened back in November.
It's a great store. I was there just two weeks ago on a store visit. Recently we've opened quite a few new stores in the Oslo area. With Ensjø, we have Fjellhamar, Nittedal. We've refurbished also some stores. The Oslo area is actually underpenetrated in terms of Europris stores. We realized that during the pandemic when Norway closed down and half of the population went into lockdown, we actually only closed one-third of our stores. And it's still room to have more Europris stores in the Oslo area, and this is a very good example, a great start to the team in Nittedal. It's a good location for Europris, and they are also a good ambassador for what we see that the customers gives us of feedback.
As I said earlier on, we conducted the same customer survey and market survey for the past 16 years, and the overall score we get from our customers has actually increased more or less continuously over that period. If you look back to trend 2007 when we started, it was one third of the customers had a positive impression of Europris, and 25%, so one-fourth, had a negative impression. Now in 2022, it's two thirds almost that has a positive impression of Europris, with only 6% on the negative side. In my opinion, I think we have taken many steps on the road to good, and we are ready to continue forward. We call the presentation From Good to Great.
I tried to tell you a little bit what, you know, good looks like. What is it that really makes us good? You know, what are we doing differently, or what are we doing right? Firstly, I think we have a very strong retail culture and also execution power. I'm working with, together, you will see my management team here today. It's a very strong and competent management team, where all of them has more than 10 years of experience from retail, and many has been with the company for quite a lot of time, and that is a big asset in today's market.
A bit later, you will hear from Vice President Strategy and Sustainability Renate, and you will also meet CFO Stina, who are the new team members that I have brought in after I took the position as CEO, close to three years ago. It's a team that is willing to learn, it's a team that is willing to look at new ideas, and they are really innovative. You know, however, you know, this management team, they cannot do anything by themselves. Of course, they have to lean on a very strong organization. The Europris team is a true strong organization, and they pull us all in the right direction. I think that the people in Europris, they're truly living the values of the company.
They are proactive, they have extremely high business sense, I have to admit. Quite direct, and they, you know, they want to do things simple. If you look at the feedback we get from the job satisfaction surveys, it's very high, and 2020 was the year with the highest job satisfaction in the company's history, only exceeded by 2021 and then 2022. People are actually quite happy working in Europris. They are very positive to company, and we also see that they stay on for a long period, like you also see with the management team. Of course, I'm sure all companies, you know, are standing up here saying that, you know, "Our company is so unique. Our culture is something special." Truly, the Europris culture is something special.
What makes us special, I think it's extremely sales-oriented and flexible, and we always strive to be better, and we keep focused on what we can impact ourselves. In Europris, we should never, you know, let us be distracted by, you know, external factors that we cannot impact. Rather, we try to change and adapt like we do now, putting more consumables on. If you don't sell those more, you know, high ticket items, you sell something else. You just have to adapt, and that's how the organization works. I think that has been a very important success factor for us over the past few years. The way the organization is adapting, changing, and also driving sales forward. The big question, you know, where are we going from here? What are we going to do differently?
What will make us great? For the most part, it's a quite boring answer. It will be more of the same, which I believe, you know, has been good, but we can always do better, so that can also be great. We will continue, you know, to chase improvements in, you know, upgrade categories, be better on the campaigns, do everything we can to improve the customer experience, and also drive customer growth. I will come back a little bit more to those details over the next few slides when I talk about growth in the core of the business, which is the category upgrades and how we drive customer growth.
Later on, you will hear Renate take you through the more exciting new part, which is the new growth initiatives. That is the pupil acquisitions, it's the customer club and development of the digital customer. Renate will also talk about our commitment to sustainability and also how we will act responsibly and be, have a more sharp focus on our impact on local communities. There's a lot of things coming on besides working with the core. Finally, I left it to Stina to discuss the financials, the investments we're going to make, how we were going to work on the cost side in order to maintain and develop a competitive price and cost position. That is the key strategy.
To sum it a little bit up, our main focus will be to create growth in the core. It will be to ensure efficient operations to safeguard our position as a market leader and our profitability. Of course, we will also explore new opportunities and for both growth and innovation, be the very often active mindset. That we have trained the whole organization in innovation and sustainability over the past year. I think it's a lot of exciting going on, and I'm sure that we will continue on our journey. As I said, I will talk about growth in the core, that will of course mean that we are going to talk about our categories.
Our ambition is to develop our store concept, to deliver a unique and even better customer experience for those who are coming for the everyday products, for the seasons or for the special occasions. We wanna be a destination for the consumers when they go shopping. To do that, we have some destination categories. The destination categories in Europris is washing and cleaning, it's the pet foods and accessories, it's storage, chocolate and candy, and it's also candles and interior. These are categories where we should be top of mind of the consumers when they think about where should they go to shop what they need. In addition to that, we use seasons to drive traffic. We should be top of mind when it comes to seasonal assortment in Norway.
If you need something for Christmas, you know, you go to Europris. If you need something for Constitution Day, you go to Europris. If you need something for Easter, of course, you go to Europris. We should be the first choice for the consumers for these occasions. We will continue to develop those occasions, you know, also new traditions like Halloween, but of course, the biggest seasons will be Christmas and the summer season. For us, it's all about creating a reason to go. That should be the categories, but we also talked in the past about the campaigns and how all this work together. We have a very good proven category management model. It's very, you know, detailed. It starts with us defining which role should this category and this product play in Europris.
We do a very detailed analysis of the situation, and we set some goals, and we create some actions, and then we implement. This category management tool is extremely important for Europris. This is how we work all category management project. You know, when you fix that, you know, you have to implement also this with and align it with the campaign engine so you know that your in-store communication is right, the leaflets, everything is working. It's a big process, almost too complicated for a guy like me. I think maybe we should have a look at Jon Boye Borgersen, Vice President Commercial, who's going to present a little bit more detail about how we actually work with our concept and the categories. It's in Norwegian. We're going to show a video clip.
It's in Norwegian, but we have subtitles for the international audience today. It will take around seven minutes, so, you know, sit tight and enjoy.
Hei alle sammen. Jeg heter Boye og er kommersiell ansvarlig i Europris. Europris er en butikk sentrert rundt kundebehov med målrettede produkter og konsepter som er tilpasset sesong og butikklokasjon. Vi har skreddersydde planløsninger der ingenting er etterlatt til tilfeldighetene. Space, arealdisponering og sortimentsstrategi har også bidratt til en mer effektiv butikkdrift. Alle varer har en fast plass, og vi bruker i større grad grunnsortiment og sesongvarer på kampanjer. Det gjør store varer større, bedrer marginen og gjør butikkene mer kostnadseffektive. De siste årene har vi gått til tilnærmet 100% styring av volumene sentralt, og alle innkjøpsforslag er basert på data basert på historikk og prognoser. Fra inngang til kasse har vi rendyrket og tilpasset hver enkelt kategori til våre kunders behov og kundereise i butikk. Vi rammer inn og skaper en stemning og en egen følelse i hver avdeling tilpasset målgruppen som er definert.
I vår butikk på Pikeveien illustreres dette godt. Inngangspartiet skal speile sesonger, anledninger og kampanjer. Her skal våre beste varer være eksponert sammen med utvalgte førstesidevarer fra kundeavis. Kravet er varer med høy rullering og impulsgrad. Det er viktig at handelen starter tidlig for at handlekurven skal bli høyest mulig. Personlig pleie er en avdeling med stor andel merkevarer. Vår andel av partikjøp og parallellimport er her viktig for å være aktuelle og skape trafikk med gode inndragere og prispunkter. Denne avdelingen står for tur for en skikkelig uplift i September 2023. I dagligvareavdelingen er de viktigste kategoriene kaffe samt poser, folie og engangs. Når det gjelder kaffe har vi vår etablerte endegondol med kaffedeal som rulleres hver sjette uke.
Vi har blant annet gjort Løberg til en bestselger i Norge og skiller oss ut med et bredt utvalg kaffemerker i forhold til de andre dagligvarekjedene som ofte er låst til sine egne kaffehus. Ren Glede. Vår kategori for vask og rengjøring er et godt eksempel hvor vi selektivt grupperer produktene etter underkategori med kjente visuelle symboler for forenklet navigasjon. Denne oppgraderingen vil bli implementert i alle våre butikker i januar. Beste venn deal. Din lokale dyrebutikk er et av våre satsingsområder hvor vi skal være best på sortiment, pris og forbrukeroppfatning, støttet av utrulling av egne merkevarer. Vi er i dag markedsleder innenfor alt til Villfugl og tar stadig andeler av hunde og kattemarkedet. Dette forretningsområdet har høyest prosentuell vekst av alle våre forretningsområder, med en vekst på 50% siden 2019. Gjennom fokusområder fremmer vi bestselgerne, samtidig som vi tilbyr et bredt utvalg tilpasset kundens preferanser.
Vi begynte med kjøkken i starten av 2020, hvor kok og stek ble helten i avdelingen. God bedre best tankegangen har løftet salget og marginen gjennom våre egne merker Kusin Holm, Selected Chef og merkevaren Tefal. Dette er en kategori som fremover skal skifte fra funksjon til mer inspirasjonsfokus med kvalitet, bredde, bærekraft og prisfokus som fellesnevner. iBox, vårt oppbevaringskonsept ble implementert i september 2021. Vi har ryddet opp i avdelingen med blant annet et gulvsystem som forenkler kundens valg. Her kan det nevnes at vi har kjøpt inn en salgsløsning fra Kina til en brøkdel av den prisen norske leverandører ga oss. Med andre ord mer til overs i alle ledd. Europris Home ble lansert i februar 2021. Home inkluderer et bredt varesortiment med fokus på eksempelvis tepper og hjemmetekstil og lys og interiør.
Utskilt i egne segmenter med blant annet temabord for inspirasjon og egne felt med bærekraftige alternativer. Disse områdene har sett betydelig vekst siden introduksjonen, drevet av vår konsept og kategorimodell. Lekeplassen er et nytt konsept i år med et utvalg på omtrent 150 forskjellige leker, og brorparten av sortimentet er fremsatt i samarbeid med den digitale plattformen Lekekassen. Her kan man også se det sesongbaserte konseptet Mer sommer for pengene. Et svært bredt utvalg av sommervarer, spesielt utvalgt for årets sommersesong. Resultat av langsiktig planlegging rundt sesonger og anledninger. Vi er sesongbutikken med stor S. Billigkroken er en egen avdeling med produkter rettet mot mer prissensitive kunder og er et ekstra realiseringsområde for å bli kvitt utgående varer og rester i butikk. Tekstil og garn er et område som har sett betydelig vekst de siste årene, til tross for et stort skifte mot netthandel.
Vi har rettet fokus mot på småtekstiler og garn, og har over tid ryddet opp i bredden i sortimentet. Vi kan aldri bli best på tekstiler, men vi kan bli best på blant annet sokker hvor Trysil er et av våre sterkeste merkevarer. Salgsvegger skiller hvert forretningsområde og benyttes for å gjøre store varer større. Salgsveggene rulleres hver sjette uke og velges ut i henhold til omløpshastighet og brutto kronemargin. Fikse Selv er et område som inkluderer bilpleie, maleverktøy og annet arbeidsutstyr. Her er det en god miks av kjente merkevarer og Europris egne produkter. I tredje kvartal ble det gjort en oppgradering av konseptet med fremheving og prioritering av de mest populære varene. Hobby og kontor inneholder produkter som for eksempel partyartikler, kort, hobbymaling og de viktigste kontorartiklene til hjemmet og småbedrifter. Her er fokus på bestselgere viktigere enn bredde og dybde i sortimentet. Knallgodtland.
Vårt godterikonsept fra sprøtt til søtt og alt imellom ble lansert i tredje kvartal i fjor og er et svært populært segment som har vokst med en tredjedel siden 2019. Her er det en solid utvalg av snacks og godteri som har blitt dedikert av betydelig areal i butikken, helt til siste del før man kommer mot utsjekk.
Håper dere nå har fått en kort innføring i hvordan vi bygger og utvikler vårt butikkonsert. Dette er en kontinuerlig prosess hvor suksessen ofte ligger i detaljene. Litt bedre hver dag er vårt motto. Ha en fin dag og god jul til dere alle, og husk, Europris gir deg mer jul til overs.
Thank you to Boye. You heard Boye talk about the fastest growing category, which was pet food, and we talked about that at the last Capital Markets Update as well. For those who remember, we said it was a high-growing category, and we still looked at margins and expansion in that, and we have since then grown by more than 50%. It's a strong category growth and a good story for Europris, and we continue to see possibilities in the pet food category. I think you also understood that, you know, doing these category upgrades, it's not something that you easily copy, or it's not something you easily do it.
See, it's a lot of work, it's a lot of details, and we have actually, you know, with 30 years of experience, we are actually becoming quite good at this. Over the past year, we have upgraded, in total, eight different categories, and Boye talked you through all these categories and also mentioned a few that are up for upgrade in the coming year, and that is of course the beauty of this. You know, with a lot of categories, as soon you have done them all, you just can start over again. It's never-ending story, and you will just keep repeating and doing over and over again and continue to find new ways of improving your concepts. Of course, this category development needs to be aligned with the rest of the machinery in the system.
The campaign engine is, of course, extremely important for Europris, but putting this together with the category management, how we work on the cost side, you know, how we work with the retail culture and implement all these changes, because doing so many changes like we've done over the past couple of years in the stores, that's actually quite demanding. Our organization, you know, they like it, they see that it improves sales, it improves the impression of the stores, and it drives us forward. Retail might, you know, from the outside, be looked at as quite simple, but retail management is actually all about the details. It's about putting all these small pieces together, and that demands competence, it demands an organization with a very flexible mindset like we have in Europris.
It's not something that comes easy. All this working is actually quite detailed and takes a lot of competence and experience and a very powerful execution throughout the whole organization you have. I would like to have a short back look to the CMU we had in 2018. Back then, we promised you basically four things. We said that we will continue to have growth above the markets on like for likes. We said that we should open around five new stores every year. We said that we should increase EBITDA margin over time, and we said that we should pay out 50%- 60% of net profits in dividends. Looking back, we have delivered on all these accounts. We have a growth that is clearly above the market. We have opened new stores on time and on budget.
We have doubled the EBITDA results and the margin from 18% - 24% from 2019 to 2022. We have paid out 63% on net profits in the period. I believe that, you know, more of the same will actually make us great. We will continue to generate value in Europris and for the shareholders by keeping that focus. We celebrated 30 years this year, and that has been 30 years of continuous growth and success for the company. Over the past year, it's not only been boosted by COVID-19, it's good retail craftsmanship in the organization, but also we've done some interesting acquisitions.
In the summer of last year, we acquired the 67% of Lekekassen, and now I will leave the floor to Andreas Skalleberg, the CEO of Lekekassen, and he will be followed on stage by Vice President Strategy and Sustainability, Renate Brattested Spernes. Before you know, take the word, Andreas, I know you will take the room, but I'd just like to, you know, give a short story of the first time we met. It was down at the warehouse in Grimstad. I was meeting you and your father, and we actually spent two hours walking around in that warehouse. We did not talk a single word about revenue growth. We only talked about how we should optimize the warehouse, the product placement, and picking efficiency in order to be a profitable retailer.
You know, Andreas is a true entrepreneur, you know? He knows that what counts is actually the money you make in the end of the day. Europris would never buy a company just to get growth. We want to buy a solid company with a very good and skilled management team. Andreas, the room is yours.
Hello? Yeah. Can you hear me? Hey, everyone. It's really nice to be here. You guys know a lot about Europris. I don't think you know a lot about us.
Very small compared to Europris and we're, you know, an online company, e-commerce company, not retail. I think we're kinda cool. We wanna present our company today and sort of give you guys more information about what we do, how we think about the future, and how we think about operations. The key takeaways for me would be, I hope that you guys see that we're not like the others. We wanna be the special ones. We're like the Mourinho. We wanna be the special ones. We're not like the other onliners talking about, "What's your market share?" What do you sell for in 2035? We don't care about that stuff. We care about what we give to our shareholders now and in five years. It's a big differentiator for us because our peers, they don't talk about profits.
They never talk about profits because you don't wanna talk about profits if you're an e-commerce company. It's much more fun to talk about market share. That's not us. We've changed quite a lot over the last year. We were acquired by Europris. We'll talk about that. I wanna cover a little bit how we make me look bad. We have new management, and they make me look bad every day because they do a better job than I've done, and that's really cool. You know, we get new people in, skilled people, and they prove me wrong. My ego is kinda hurt, but that's good. I think that's a good thing. I always start presentations with, to be honest with you, with our warehouse, because it's...
I'm really proud every morning when I drive to the warehouse because it's ours. We own it. It's our warehouse. It's sort of like a physical monument that we drive through every day, you know, past every day when we get to work, it's a big warehouse. It's 21,000 square meters, it gives us an edge. We own the warehouse. We control the cost, we'll also cover that, how we think about operations and the whole scheme. I still consider our company to be a family company. We're not a family company anymore, we keep the tradition. We keep the culture.
I'm the third-generation owner of the family company, you know, it was started just after the war by my grandfather. It's the same principles that we have today that we had before. I remember when I was a kid, I was always working. I hated stores. Trust me, I hated stores. I was working in the store gift wrapping something. My grandfather came along, and he said, "Why do you use so much tape? That's quite expensive. You should do this technique so you use less tape." It's kind of the same principle today. You know, we keep that mindset of, like, how can we cut costs? How can we cut costs? How can we cut costs all the time? It's the same mindset.
You know, what's changed is that when I moved back, I was in Boston. Long story short, I called my father and I said, "You know what? Do you have any contacts in Oslo? I wanna go back to Oslo, maybe some consulting or whatever." He said, "Why don't you try the family company?" And I was like, "No, no, no. Retail is, nah, not for me." At that point in time in 2010, e-commerce was booming in the U.S., and we saw underdeveloped situations in Scandinavia. You know, we grabbed a few beers, my brother and I, and we talked about, like, why don't do we just do e-commerce in Norway? That was sort of where it all started.
It was a huge change because we had a family company. I was the third generation, when I moved back and I said to my father that we have to do a transformational change. It's very easy to talk about now, like we know the success story right now, like we've done pretty well. At that point in time, we did something really cool that I'm proud of at least. We made the change before we made actually 1 NOK in profits. We shut down all the stores before we had opened the online store. We made a huge change to the company to make it digital, to make it, like, IT-driven, and that was really crazy because my father was getting closer to retirement age.
In 2013, when we launched Lekekassen, I managed to do something that we'd never done before. We lost NOK 2.5 million, and that's a lot of money because we had never made big profits. I remember my grandmother summoned my father, and she said, "You know, he's not the right fit. You know, you know, you have to get rid of him. He's crazy. He's crazy. This is his American mindset, you know, get rid of him." It's true, and he had my back because he saw like, yes, we lost money, but he loved the fact that, you know, this product, we sold 100 pieces in one day, and in the stores, we would need three weeks, four weeks, seven weeks to sell the same amount of quantities. He saw an upside.
What we did, it's the stupidest thing I've done in my life. We put our house on the line, everything we had on the line, and we got more loan in the bank. We did not want outside investments. We put all our money on the line. I just had a new baby, but it's the stupidest thing I've done, but I love it. It was so much fun. This is the brag slide. Now you're supposed to clap and, you know, this is just the way it is. We're now the number one online retailer. We're proud of that. We're the toy specialists in Scandinavia. We're just moving into Denmark and Sweden. There's a huge growth potential in Denmark and Sweden for us.
As investors, as shareholders, you have to understand that in Norway, we have a sort of a milking cow. We have the market position. We believe our dominance is 40%-50% of the online toy market space in Norway. In Denmark and Sweden, we have untapped potential. We have almost nothing compared to what we have in Norway. For the years to come, you know, we want to focus on the growing in Norway and, you know, keeping core strong, but we wanna invest in growth in Sweden and Denmark. It's a little bit sort of contradicting itself, but we have different strategies from different markets. Norway is just core, core profits.
We are making profits in Denmark and Sweden as well. We know that volume is key to being even more profitable in 2026. Last but not least, this is kind of cryptic, who said we only have to do toys? I didn't. We're really considering new categories. The toy market in Norway is about NOK 3 billion. If you look at NorgesGruppen, Kiwi, Europris, the others, they play around with much bigger numbers. We want to get into the game in the right manner, in the right way. We want to make sure we find the correct categories where we can actually make a profit, make a splash. It has to be the right way. It's also important for me to say that, you know, we're an online value company.
Since the get-go, it's easy to say, you know, "Just put all your money and invest in growth. Don't care if you have a profit or not," but if you have the house on the line, it's different. For people that actually bet their house, they know that it's kinda. It's not a good feeling when you know that if it goes really bad right now, I will lose my house, and then you have an angry wife, and yeah, it's just not a good feeling. We have been obsessed with always making profits all along. The great thing about having that mindset is that it adds on. Like, if you have the mindset of making profits, you get that in all your departments. In our IT department, they talk about profits. You know, show me the IT department that talk about profits.
I don't think that many companies have IT departments talking about profits, but we do. We have the courage to talk about profits in all departments, and that's also very similar to Europris, I think, where profits first mentality is also in our company, and it separates us from the other online companies, in my opinion. We're a family company. The problem was in 2020, you know, the plan was all along I was gonna take over the company. I have two brothers, and we just had one big problem, and we were getting too profitable. It would not be fair for me to just take over the company and my brothers to, you know, get nothing.
To be honest with you guys, it would be hard for me to go to the bank and ask for a few hundred million NOK and do another round. I think my wife would be pretty angry. You know, it's. We had to think differently. We had to go out and seek investors. In the start of 2021, we went and started talking to people, and we got several offers for the company. The problem was that the first time I met Espen Grimstad, I was kind of in love with Europris. My advisors, I don't think they liked what happened because I was sort of stuck with. The conversations we had were so different. Like, when you talk to private equity, it's more financials and spreadsheets.
When you talk to Europris, they don't care about... They care about it, but they care about operations. To me, that was just like, I can work in this system. I can be an entrepreneur in this system. I can continue to deliver profits in this system, but I don't wanna report to someone who's just obsessed with numbers and not the story. The story is more important to me than the numbers. Obviously, numbers matter, of course, but you don't get good numbers if you don't have good operations. We sold the company in 2021 to Europris and yeah, it's been... I'm really happy. We, we made the right choice.
We made the right, you know, it was the right choice for us to make to sell to Europris, and I'll try to get into a little bit how we operate as, you know, sort of one unit, two units now and give you guys some more feedback on sort of like information about how we work. The most annoying part, to be honest with you, they released numbers today. It's kind of annoying when you think you're a good negotiator, and you get, you know, you get bought out by Europris, and you, they prove you wrong in all aspects of your business, so it's kind of annoying. You know, we have better terms for everything right now than we had before. I thought we were pretty good, but we obviously were not. Our financing is better.
You know, utilities bills are, you know, crazy low compared to the market. Just right after they purchased the company, we took over the direct agreement that we saved so much money on sort of the logistics from Asia. I think what we learned the most from is actually the operational know-how, how to hedge risk, how to think about risk in a different way, and it's really where we try to steal from more mature companies because we're a very small company with not a lot of employees. We try to sort of steal the best from the big companies, but we don't wanna be like Europris. We wanna be special. We wanna be Mourinho, the special ones. We wanna be small and agile. We're not trying to copy Europris. We're trying to steal what the best practice from their companies.
I think that's important. It's, it's the separator. We, we do not want to copy-paste, but we really want to make sure we take, we leverage all the synergies that we can take and make sure, you know, that that can make us more profitable. That was seen in this year that, you know, when times are tough, our OpEx is really in the, going in the right direction, and we have the correct focus, in my opinion. It's also fun to give something back. I'm proud that we have opened up our books, our data, and our, you know, head buyers spent a lot of time with Europris to make sure that we give our top SKUs to Uncertain. Now they have. The stores are with fully branded toys, and kids want branded toys, let's face it.
They care about if it's, if it's Pokémon or, or, you know, they don't, they don't wanna get a copy. Now it's like more of a brand focus when they go into Europris, and I think it's great for the brand Europris. I think it's great for us, and I think it's great for consumers. I, yeah, I truly believe in, in their toy departments. I think we have to be a little bit patient. I'm not very patient, but I think in three to four years, I think they will take massive shares of the toy sales in Norway. I think it would be similar to the toy, to the pets segment that just presented, I think we will see massive market share in the next couple of Capital Markets Day, we will present that, hopefully.
You know, I briefly mentioned this, but we have to operate as separate entities. We cannot be the same. It's so important, and I think Europris, Espen, who's the Chair of the Board, they are really smart about this. They don't try to implement all their strategies to us. They don't try to force any ideas on us. They want us to be different. They want us to be you know, to be a separate entity. In that light, there's a lot of trust in that, and that's really important to me as the founder is to stay on and to be here because we need to have trust, but we also, we're not afraid to learn. We're not afraid to be proven wrong. We're not afraid to be challenged.
On the other hand, we also wanna operate our business as an e-commerce business, where e-commerce first is very different. I compare e-commerce to Formula 1. I'm not saying retail is easy, but e-retail is different because if you have 276 stores, that's 276 attack points. We have one attack point in Norway. You can go out to Lekekassen right now. You can check pricing. You can see everything we're doing. It's just completely like, it's open. It's so easy to copy us. You can copy us in two seconds. It takes you NOK 20,000 to set up a shop and copy parts of what we do. Our focus is on operations, on cost, on IT efficiencies.
It's not on always being great to storefront, but it's everything in the back that's different. You cannot work. I made a mistake in 2015. I remember it. You know, one of our big suppliers asked me, "What's the difference between e-commerce and retail?" I said, "No, it's the same thing. Same thing." We had an example. We sold 40,000 soap bubbles, small, to kids in one season in November. It was a great success. We had 80% margins, or 82% margins. We laugh about it today because at that point in time, we didn't have a really good focus on what's the picking cost of that product. The margin was 82%, yes, but the picking cost killed the profits.
When Europris talks about margins as a percentage, we talk about margins as a nominal figure, because we know that we can make a lot of money on a 17% profit item. If the picking cost is 1%, and logistics cost is 3%, then that leaves a lot of room for profits. E-commerce is different. You cannot think of. Like, on trampolines, if we make 40% profits on trampolines, it's not good business for us, because logistics cost kills us in online space. It's very, very different mindset in e-commerce compared to stores. That's why we cannot be the same. We have to be different. There's one slide that sort of sums up our company. It's this one, and it's really, really important to me.
In 2016, we made a conscious choice. We do not outsource. Nothing. Everything is in-house. We control the service. I showed you the warehouse. We're proud of that. It's ours. It's physical. It's ours. I think it's a really, really good investment. Also, we have in-house developers. We build proprietary technology. It's there in the books, but it's not, it's not in the balance, but we spent it. You know, we have our technology's 0 NOK in the balance, but it's worth a lot more. We have our own technology. We have our own warehouse system that's built up on open-source technology. We don't pay license to SAP or whatever. It's ours.
We control the service. We have EDI connections to our logistics partners, so that when we ship to Denmark and Sweden, it's by the click of a button. It's automatic. It's ours. We developed it. The only thing where we pay license is actually storefront, where we use Magento, because that's just the best practice in e-commerce. You cannot get around it. You have to use it. Everything that happens in the background, in the back office, in the company, it's ours. We control the service. As a cost-focused, profit-focused company, I think that's really important that you guys understand. No one can come to us and say, "Now your license fees are NOK 10 million per year." We control the service. Our time to market is really fast. Most interesting is that when... This year, we spent a lot of money. Our new COO came in with new ideas. How we pick what we should do to increase picking efficiency, I'll get to it a little bit later.
We spent a lot of money, the thing is, before we start a big job with our IT department, the question is always, is it going to make us more profitable? It's always that question. It's not, we don't wanna be cool. We don't wanna be fancy. We don't wanna have some cool gadgets on the website. We say, "Is it going to make us more profitable?" Yes, okay, we'll take the investment no matter how much it costs. That's the mentality, and trust me, I see numbers. Everything is public in Scandinavia. I think other e-commerce players, they don't have that mentality. They wanna be cool. We don't wanna be cool. Our focus is, since last year, we know that COVID was just a really good thing for us. It's always been to reduce cost.
Our operations has to be 20%, 30% better every year, not 2%. In retail, 2% is great. In e-commerce, everything is copying, everything is fast, everything is just so blooming. We live under the constraint, like, our thesis is always, margins will go down next year. That's how we work. In order to maintain our profits, in order to maintain a solid dominance in the market, we need to be better. That's where I see a biggest difference in the company now with new people, with new skill sets, is that we're so much more process-oriented than we've been in the past. In the past, it was a big weakness of the company. It was more like the founder just randomly, you know, making a decision, and five minutes later it was executed.
Now it's more process-oriented, more structured. It's maybe an area where we look a little bit more like Europris, and we adapt from a more mature company, that we learn that, you know, maybe it's better for us to have a process that is a little bit more planned. We invest in people, we invest in data-driven processes, and it's made us so much better, in my opinion. You know, that continuous investment in people, technology, processes are, you know, really helpful because we think the winter is coming. Espen showed a slide where, you know, high price point was down 23.1% in Europris stores.
We're seeing the same thing, not the same numbers. It's a complete train wreck for our competition and us and, like, everyone. Like, we had to fight so much more for our money this year. I'm really proud of what we are delivering, but it has really been so important for us to have control over our operations this year compared to other years because it's been really tough online compared to other years. This is my last slide. It's also a very important slide to understand the business. I don't think we talked about this before. Our number one cost in our company is our logistics cost, outbound logistics cost. We signed the new agreement in December 2021, a five-year agreement with a 2% inflated fee, inflation.
It's very good for us right now. We saved 20%, +20% year-to-date, year-over-year in logistics cost in Norway. Major for us. It really helps us when times are tougher. This has helped us a lot this year. We think that that's great news for the years to come. We have up until 2027 with 2% inflation fee, inflation cost. It's really big for us, and it was maybe lucky, but it was also good timing of when to sign a five-year agreement with your logistics partner, because we would never get the same terms today. Year-to-date, they have increased prices with about 11% with PostNord and Bring. I think we're pretty lucky.
What I'm most proud of is our warehouse efficiency program. It was launched by our COO, Severin, he's here today. He came in and asked all the right questions, and I thought in the beginning like, "How can you come in? You never worked in this warehouse. How can you come in and come ask all these questions?" It really has changed the mindset of the warehouse. We now have stats for everything. Like, we're crazy about stats. We have stats for everything. You know, we see that now we're able to put those stats in a system. We're able to put heat zone mapping of where we walk in a system. We're so analytical compared to how we were one year ago, and I think this is just the beginning.
Not to put pressure on Severin, but it's, I think, in five years, I think our warehouse stats will just be insane. They have to be, because e-commerce is like Formula 1. You cannot be the same. You cannot have the same car the next year. You have to improve, and you have to improve fast. If we live under the assumption that we know good is good enough, like it's copy-pasted next year, so we need to be much better. Last, the famous last words is that we also, you know, learning from our new owners is we launched our own loyalty program this year. It's. We're super happy.
We don't have 1.2 million members, but we have 40,000 members today. We launched it in September, I think that's pretty good for us. We also see the same trend. They spend a lot more with us, and I think that's, for the years to come, I think we will spend a lot of our time on making sure that we have a good loyalty set up for e-commerce shops. We will launch it in Denmark and Sweden also. It was launched in Norway this year as a test, but it's gonna be launched in Denmark and Sweden for next year. Yeah, that was all that I had. I'll leave the word to Renate Spernes, and thank you.
Thank you Andreas. Lekekassen is a great example of one of the companies that we have invested in as part of our pure-play strategy, which is one of the topics that I will cover in this next section. My name is Renate Spernes, and I'm responsible for strategy and sustainability in Europris. Today, I would like to talk to you about Europris' new growth strategies and sustainability that goes on top of growth in the core covered by Espen. Our key strategic focus areas are to strengthen our price and cost position, to improve the customer experience, to drive customer growth, and also to act responsibly. All of these four focus areas are of course also guiding principles when it comes to new initiatives.
In the following section, I will start by presenting our pure-play strategy, and then I will go through an introduction on how we will create growth and improve the customer experience through our digital platforms using customer insights. Finally, I will talk about our sustainability profile and explain how Europris will increase our position as a responsible company going forward. Now, let's start by looking at e-commerce and our pure-play strategy as an additional growth lever for Europris. Like most retailers, we have seen the growing prominence of the online market in the recent years, and we recognize the importance for us to capture our fair share of this market.
While still only representing 8% of the total Norwegian retail market, totaling NOK 542 billion, the online market is growing rapidly, with over 20% annual growth from 2018 to 2021. Bear in mind, it will still be our physical store network that is our core sales channel. We experience that the demand for our concept, which is low-cost products, wide product selections, and targeted campaigns, is not as significant online as it is in store. Most of our online sales are made through click and collect. As such, we must adapt our strategy to capture our fair share of this rapidly growing online market. We started building our pure-play portfolio in March 2021 by acquiring the interior concept Lunehjem, followed by the toy concept Lekekassen in the same year.
This summer, we made our third acquisition, which is the Strikkemekka group, consisting of Strikkemekka, which is the second-largest online store for yarn in Norway, and the direct-to-consumer interior concept Designhandel. When selecting these pure-play concepts, we have a targeted approach to ensure they have a good fit with Europris. First of all, the concepts must be profitable and have a strong position within the segment they operate. We look for specialists with standalone concepts. We target segments that fit with Europris profile to enable synergies. Last but not least, we want to invest in concepts that have strong organizational structure and also competence with entrepreneurs that we believe in. As you can see, we have 67% share in all of our pure-play concepts.
The reason for this is that we want to ensure that the entrepreneurs continue their successful path as standalone businesses and to keep them invested and maintain the independent and entrepreneurial culture that built the company in the first place. In sum, this portfolio has strengthened our e-commerce offering, enabling new growth through concepts and more specialized and better suited for the online marketplace. The big question: Why pure-play? By building pure-play concepts, we accomplish three main things. First, we expand our online offering. Customers, they show different behavior online than they do in the physical stores. The core of Europris concept is that the customers enter our stores with one product in mind and pick up additional products as they walk through the stores, while the online customer is more targeted.
With specialized concepts, we reach key customer segments and tend to select more specialized online retailers with a single shopping purpose. Secondly, we can also realize a range of synergies, such as cost reductions through operational synergies and a two-way knowledge sharing about the category and also customer needs. Also, we gain insights and best practice from e-commerce that can be implemented across the pure-play portfolio as it grows. Thirdly, the pure-play concepts are customized for a single category, and this enables also a higher level of inspiration and a more customized customer journey that improves the shopper experience, which we have experienced is more difficult to do in a one-stop shop with a wide range of categories. As you can see from our e-commerce sales in the recent years, pure-play is the key driver for increased revenues.
Lekekassen, Lunehjem, and Strikkemekka have contributed with 689 million NOK over 12 months since of September, with Strikkemekka only included from July. We look back to 2019, e-commerce only represented around 0.5% of Europris' total sales, but this has now grown to 9%. The pure-play has enabled us to capture a significantly larger share of the online marketplace. It comes to Europris e-commerce, it represents a modest share of total revenue, with some growth through the pandemic. It is important to note that Europris website is mainly a marketing channel. Its main purpose is to introduce our stores, products, and offerings to drive traffic to our physical stores. The website is a very important platform for Europris, even though it's not a significant revenue driver for e-commerce.
So far, we have built our pure-play portfolio within the categories fun, home, and hobby across Norway, Sweden, and Denmark. This enables us not only to improve our offering in Norway, but also to penetrate new international markets. We see also a lot of potential for expanding our pure-p lay portfolio further. Expansion can be done in three ways. We can add new concepts within existing categories, but we can also develop co-concepts that cover new target categories, and third, we can roll out existing concepts into new countries and increase our international presence. Of course, we will continue to look for good companies and opportunities for new pure-p lay concepts, and we'll evaluate them in line with our targeted pure- play approach. That was our pure-p lay strategy.
Now let's look at another way to drive growth through the digital customer, where we use digital tools and platforms to gain insights about our customers, enabling us to better meet customer needs. By doing so, we can increase customer loyalty and value created per customer. Our three main targets are to grow the number of customers and shopping frequency, to increase the basket value, and also to give a more personalized shopping experience. When we look at our Mer customer club, the number of members have grown rapidly over the last three years, now reaching more than 1.2 million members. These customers, they have significantly higher customer value and loyalty than the non-members, and they stand for around half of all our revenue. The key driver for this is that they have a higher shopping frequency.
On average, our Mer members make 16 transactions per year compared to 7 from non-members. Not only do they shop more often, but the average basket value is also higher, showing NOK 267 compared to NOK 234 for the non-members. Building loyalty and increased shopping frequency is therefore a high priority for us. How can we use this customer insight to drive customer value? We start by identifying target demographics, then through data collected over time, we develop customer profiles with shopping patterns and preferences, enabling us to customize our outreach, especially for each group. We are still in the early stages, but we are starting to gain really good control over our first-hand customer data, and we are already seeing increased conversion rates through more personalized outreach.
As a member of the Mer club, you receive unique offers and more personalized outreach. We use life cycle dialogues. We are in the beginning of this journey, but we have developed a structured approach for building loyalty, where we're using detailed insight about the customers. We do this by segmenting our customers based on their shopping frequency and whether this is growing or declining. For instance, for new customers, we attract them by onboarding them to the Mer club and also by introducing relevant offers and product recommendations in order to spike their interest. For customers who tend to shop less often than they have done before, we try to win them back through more personalized offers. We also reach out to our customers based on recent purchases.
This type of communication is mainly done through newsletters, emails, and text messages today. We are also expanding into additional channels such as digital advertising and also social media. Here are some of our examples on how we distribute newsletters to specific customer groups, such as families with young children, flat owners, home and cabin owners, or nearby residents. All of these customer profiles have, they have distinct needs and preferences, and we see that by using more personalized outreach, we gain 40%-60% higher click rates compared to generic newsletters. As mentioned earlier, europris.no is also an important communication platform towards our customers. europris.no is a key marketing channel providing information about our products, offers, and campaigns.
When we look at monthly visits to our web page, it has increased from NOK 1.3 million in 2018 to NOK 2.2 million over the last 12 months. Monthly visits have naturally declined somewhat since 2020 and 2021 as people spent more time online whilst being at home during the pandemic. Overall, we see that europris.no continues to be a strong driver of traffic to our stores. In order to fully utilize the digital customer enabling future innovation, we have identified a need to upgrade and modernize our internal ecosystems and build a stronger digital foundation for Europris. We will never be a front runner for technology, but over the years, we have built up some technical debt with outdated ERP systems, cashier systems, and also reporting systems.
This upgrade started in 2021 and is expected to be fully completed early in 2025. The project will give us better internal control, but it will also benefit our customers, for instance, by enabling us for setting up self-checkout systems. These selected solutions, they are tried and tested and is implemented in cooperation with solid partners. I'm happy to tell you that as a result of strong project management, the project is so far both on track and on budget. Now, let's move from the digital customer and look at how we will create growth by increasing our position as a responsible company. To act responsibly is of course not something new to us. This has always been important for Europris.
As we strive towards sustainability and see an opportunity to improve our position by contribute positively in local communities, we have included this as a fourth key strategic focus area. Sustainability is an integrated part of our strategy and value chain. What we mean by this is that we don't see sustainability as a separate focus area. It is an integrated part of our core strategy and in everything we do. We strive to reduce our impact on the environment and to give everyone the opportunity to make sustainable choices through sustainable products. Sustainability is, however, not just about reduced emissions, it's also our people, which is what makes Europris great. Being an attractive place to work is essential for us as a company.
Equally, we want to contribute positively to the people and the environment in the many local communities that we are a part of. To achieve this sustainability shall naturally be a part of our governance and all the decision-making processes throughout the organization. I'm also happy to announce that Europris has decided to commit to reach net zero emissions by 2050, which is in line with the Paris Agreement and science-based targets. For Europris, our biggest footprint lies in indirect emissions in the value chain, also referred to as Scope 3. This goal requires a joint effort from the whole industry, and Europris want to contribute to this. Not only is this expected of us as a company, but we also believe that this will help strengthen our position in a competitive retail and labor market.
While we are still working on specifying our action plan, we have identified some key focus areas for improvements, which is to make our products more sustainable and facilitate more circular operations, for instance, through the use of recycled and recyclable materials. We will work on becoming more energy efficient and increase the use of green energy, where one example is that we plan to install solar panels on the roof of our central warehouse. Green supply chains will also be a key focus for us. To illustrate how we approach this, we have prepared a video showing recent project in collaboration with ASKO and NorgesGruppen. Let's have a look.
Det er en nullutslippstransportkjede som vi bygger opp her. Båtene er batterielektriske, og vi skal ha batterielektriske terminaltraktorer når de kommer på markedet utover neste år. Vi vil også ha elektriske lastebiler som vil trekke trallene fram og tilbake til kaien. Vi vil ha en helelektrisk transportkjede som krysser Oslofjorden. Vi startet jo allerede i 2017, og da tok vi også kontakt med Europris. De har vært med oss hele veien. Som vi ser her i dag, så står de her med den første trallen som skal da fraktes over til Horten. Det vil være redusert bemanning om bord i båtene de første 2 årene, men så vil de bli autonome. De skal de gå uten bemanning om bord. Vi har også et mål om å gjøre terminaltraktorene ubemannet også om 2 års tid.
Det vil si at da skal båtene lastes og lostes med elektriske ubemannede terminaltraktorer. Det vi gjør i dette prosjektet, så er det at vi ikke bare går over til elektrisk drift, elektrisk energi, men vi vil også redusere energiforbruket. Du bruker mindre energi med en EL-transportkjede framfor en dieseltransportkjede. Når det gjelder fartøyene, så reduserer vi også hastigheten på fartøyene for å bruke mindre energi, i tillegg til at det er elektrisk. Med denne transportkjeden her som vi frakter varetrallene, så vil vi dermed få brukt disse batterielektriske bilene mye mer effektivt på hver side av fjorden, så vi trenger færre lastebiler for å produsere samme mengde varer, og det blir færre veikilometer. Vi bruker jo strøm, og ASKO produserer jo strøm, så i dag produserer jo ASKO like mye grønn energi som vi bruker.
Når vi kommer i gang med disse båtene og batterielektriske lastebiler, så vil vi bruke mer energi, og da må vi produsere mer energi. ASKO er med i veldig mange prosjekter i forhold til vindkraft og solkraft. Hva er målet og hensikten med det vi gjør? Det er jo for å levere en grønn transportkjede til kundene, altså, kundene som går i butikken, forbrukeren vår. Europris, som har vært med oss helt fra starten og vært veldig ivrige på å bli med i dette prosjektet for også å skape en nullutslippstransportkjede for dem. De skal vite at de får levert varer i en grønn transportkjede til sine butikker. Det er hovedmålet vårt.
As you can see, committing to zero emissions by 2050 is something we do as a society together. We have to collaborate across industries and form alliances to drive real change. This is not something we can do by ourselves, and it has been wonderful working with ASKO and NorgesGruppen, and we are very happy that they allowed us to take part of this project. As a retailer selling products, an important step towards sustainability is to give our customers access to sustainable choices. We will do this by increasing the share of certified products in our assortment and also the use of recycled and recyclable materials. We will also improve quality and reduce product returns.
Paving the way for sustainable choices is not just about making sustainable products, they also need to be available to everyone and not be premium priced compared to less sustainable alternatives. As a low price concept, we want to take a position by being a pioneer within affordable, sustainable products and make it easy for all our customers to select green options. We also believe that Europris can take a position in local communities. With 276 stores, Europris is part of many communities around the country. Where we are present, we want to contribute positively and establish Europris as the local hero. We want to do this by launching a range of initiatives across the country, adapted and implemented according to local needs.
One example is that currently we roll out an All We Want for Christmas campaign, where the stores, among other things, donate products to those in need in their communities. We believe that this can make Europris stand out from our competitors and create a more personal connection with our customers and communities, and also generate increased loyalty and attract customers to our stores. We have great employees in our stores across the country who are really dedicated to their communities, and we want to support them, where we based on experience and best practice, develop toolbox for the stores that can help them implement local initiatives and build local trust, reputation and loyalty. While launching Europris as the local hero is a new initiative, we are already building from a strong position as a positive local contributor.
In our annual Europris brand tracker, we asked the Norwegian population whether they agree that Europris contributes actively and positively in local communities. As the results show, 46% of the respondents either agreed or strongly agreed to this statement, which we think is a very good starting point. This was the first time this question was featured in the tracker, and we look forward to monitor this and monitor our progress in the years to come. In order to summarize, we are exploring several ways of adding to Europris core growth. First of all, we are developing a promising pure-play portfolio, allowing us to address the high growth, online growth marketplace from a new angle with high potential, both from our existing concepts but also many new opportunities for the future.
Second, Europris is beginning to uncover the potential of utilizing the digital customer to drive customer loyalty and generate growth through a more personalized customer experience. Third, sustainability is an integrated part of our strategy and will continue to be central for Europris as we grow our business. Finally, we will continue to act responsibly and become the local hero in our communities through local initiatives. We are looking forward to get that project up running. That was all from me. Now we will have a 15 minutes break, and then we will gather back here. Stina will go through the financials. Thank you so much for listening so far.
Hello, and welcome back. My name is Stina Byre. I am the CFO of Europris, a position that I've held for the past 2 years. As Espen has communicated, we have delivered on the ambitions that were set on the Capital Markets Day back in 2018. This includes the ambition to have higher growth than the overall market. If you look over at the past decade, you can see that the Europris chain has outperformed the variety retail market. You might also notice that 2020 stands out, and following COVID-19 also came a sharp increase in retail demand in general. This has made year-on-year comparisons challenging as different companies have been differently affected by infection control measures.
For this reason, we have looked at stacked growth since the previous pre-pandemic period of 2019 and until today. As we showed you in the third quarter, by stacking the growth for the first 9 months of the last 3 years, you can see that total retail has had a growth of 12%. Variety retail has had a growth of 19%, and the Europris chain has had a growth of 28%. Espen and Boye have gone through the reasons for this outperformance, and I will also dig a little bit into this shortly. Before I do that, I would like to share with you a trading update for the first 2 months of the fourth quarter. As you can see, it has been a strong development, with almost 8% growth for the Europris chain.
We have seen higher sales of consumables and lower sales of seasonal items. This fits with the outline that Espen gave for the current retail environment, and it also shows that consumers are more cautious. Our pure- players have combined also had growth, and this is especially driven by Lekekassen that had north of 5% growth for these two months. I would like to remind you that we still have the grand finale December to go. That is the biggest month of the fourth quarter. Around this date last year, again, COVID implementations were implemented, so we are facing tough comparables, but we are very pleased with the start so far.
Turning to our consolidated group sales, you can see that we have grown from a little over NOK 6 billion in 2019 to close to NOK 9 billion now, for the last 12 months. Over the next pages, I will go a little deeper into explaining the drivers behind this growth. To sum up, we have a higher number of customer transactions. We have a higher average basket value. We have done category upgrades affecting, contributing positively. We have added new stores, and we have upgraded our store portfolio. In addition, we have also acquired some pure- play companies. As Renate said, for the past 12 months, they have contributed with revenues of close to NOK 700 million.
As both Espen and Renate have talked about, we have a solid customer base with more than 1.2 million members in our customer club. We estimate that we have south of three million unique customers, and they have come and shopped with us 35 million times over the past 12 months. This is a growth of 8% comparing to 2019. The last 12 months, the average shopping basket has had a value of NOK 242, and this is an increase of 19% when comparing to 2019. This is both from more items in the basket and also from higher average value per item. The latter is affected both by changes to the product mix and by inflation.
As Espen and Boye again have talked about, is how the category upgrades have contributed to the sales development. To demonstrate this, I've taken out three examples I would like to share with you. What you can see from these graphs is that categories that we have upgraded have outperformed the performance of the total chain for the following year or more. The green line, that is the sales development for the upgraded category, and the red line is the development for the chain. As you see the green line above the red, that's the outperformance for those categories. We saw this when we upgraded the kitchen category in the first quarter of 2020. We saw it again when we upgraded the home category in the first quarter of 2021.
Now the same pattern is playing out for the pet category that we upgraded in the first quarter this year. Now, we're not saying that all category upgrades play out exactly like this, but it is mostly the case. These upgrades are also important to stay relevant and in order to deliver on our strategy to improve the customer experience. From 2019 and until this date, we have added 20 new stores to our portfolio. With this, we have delivered on our ambition to open on average five new stores a year. I'm also happy to share that these stores have more than delivered on the strict investment criteria that we have set. If we look at the direct CapEx to the EBITDA, they've had a payback of around one year.
In addition to this, we have also modernized, expanded, and relocated a total of 66 stores over the same time period. We've also added revenue and expanded our scope with the pure-p lay acquisitions. Lekekassen is the largest acquisition, and as you can see, the fourth quarter is their main quarter. Even though we still have December to go, as I said, we are pleased with the development so far. Turning to our margins, we saw a solid jump in 2021 and in 2022. Favorable freight rates have played a big role without a doubt. In addition to this, we have seen positive effects from category initiatives and other operational initiatives, and we also had positive effects from a higher share of private labels.
Even though the advantage we have had on freight will disappear, for these reasons, we still believe that the margins will stabilize at a level somewhat above where they were before the pandemic. Looking a bit more into container freight, I'm here trying to illustrate our rates compared to that of the spot market rate for container freight. Please keep in mind that our rates are not exactly comparable, as our rates include more, with for instance, shipping all the way through to Norway and guaranteed capacity. What you can see is that up until the end of 2020, we had rates around the market level. In 2021, the freight rates skyrocketed, while we had a fixed agreement. This of course gave us a huge cost advantage.
Even though in 2022 we had to accept a large cost increase, we still had a very competitive agreement in place. This agreement was supposed to last for the full year of 2022 and 2023, but we have been able to negotiate a new two-year agreement starting already 1st of January, 2023. With this agreement, we will have rates around 50% lower than the current rates. Please note that the P&L effects will be delayed as we of course need to turn the inventory we already have in stock. Even though we have lost our cost advantage from this, with this new agreement, we still have a competitive agreement in place. Turning to operating costs.
With the high volume growth we have seen through the pandemic, we saw a sharp decline in the OpEx to sales ratio. These scale benefits are not possible to fully uphold. We have a high attention to keeping costs under control and to maintaining a strong cost discipline. Around 60% of our OpEx is from salaries and other employee benefits. For this part of the cost base, we follow collective agreements, meaning that we will be impacted in the same manner as our competitors. On the Capital Markets Day in 2018, we also shared our investment plan for the logistical setup and how to become more cost efficient throughout the value chain. Now, from that situation until today, the world is different, and we are no longer in the same reality that the business case was built upon.
What I can say is that when it comes to warehouse consolidation, the, we will not be operating from one warehouse until the second half of 2024, so the consolidation to just one warehouse is delayed. We have realized savings, as we have already gone from five warehouses to two. When it comes to the automation of the warehouse, as previously communicated, this was delayed due to software issues. These have been resolved, and we are seeing efficiency gains. To sum up, it's a different situation than what we had. Full savings are delayed, but they are intact. Another topic that many people have top of mind these days is the electricity prices.
We hedge our electricity prices. Because of this, we have avoided costs for the full year of 2022 of NOK 80 million, compared to if we had gone in the spot market. Next year, we will have an OpEx increase from this of NOK 20 million. Again, from the prices we now have in the electricity market, with this, we still avoid a significant cost increase also next year. There's one more thing I would like to mention. It's not part of the OpEx, but it's still good to note, and that is our rent. Our rent is CPI adjusted, but we are booking this after IFRS 16 leases. This will impact our lease depreciation next year. Also with higher interest rates, the lease finance cost and finance cost in general will of course also be impacted.
To sum up the P&L development over the last years, we have seen high volume growth, we have seen improved gross margins and strong cost discipline, and this has given a high earnings growth. With the operational leverage that we have had, you can see that on average, the annual average growth for revenues has been 13% over this time period, while for net profit it has been 49%. Cash flows from operations increased significantly in 2020 and remained at a high level also in 2021. Over the past year, we have had an increase in net working capital of NOK 600 million. This is mainly due to inflation and also from higher volume. I guess nobody will be very surprised when I say that they will remain in stock until the next time we have that season.
We invest in growth and to improve our cost position. Here you can see a split of our investments into normal maintenance investments, into investments in new stores and upgrade of the store portfolio, investments in the new and expanded warehouse, and also investments to upgrade our IT platform, including ERP and point of sale that Renate mentioned. These additional investments in the warehouse and the IT platform are expected to conclude in 2024, and with current plans, we expect a more normalized CapEx level from 2025 onwards. We are committed to maintaining an efficient balance sheet and to distribute excess cash to our shareholders. In the period from 2019 to 2021, we have purchased pure- players for NOK 600 million. We have repaid debt of NOK 700 million.
We have repurchased shares for NOK 240 million, and we have distributed a dividend of NOK 1.1 billion. As a solid and well-run company, we strive to have financial flexibility, and this has served us well. As I mentioned, we have had NOK 600 million increase in net working capital, and we have also paid out a record dividend of NOK 644 million this year. Our financial position remains solid, with good flexibility for seasonal fluctuations throughout the year. If we look at our bank loan, we have a term loan of NOK 1 billion. Of this, we have hedged 60%. Over the past three years, this has given us a financial gain of NOK 85 million. Of this, NOK 48 million as of September this year. We also have an RCF of NOK 1.2 billion and an overdraft facility of NOK 200 million.
We have ample financial headroom within current covenants. EBITDA to net interest-bearing debt is 1 compared to the covenant of 3.25. Both the term loan and the RCF is maturing in January 2024. We are already in dialogue with our banks about the refinancing. With strong earnings and cash flow and a sound financial structure, we have been returning excess cash to our shareholders. Every year, we have had an increase in our ordinary dividend. On top of this, we have also paid out extraordinary dividends when the results have been extraordinary. Overall, we have distributed 63% of net profit over these four years. This is somewhat above the dividend policy range of 50%-60%.
It is in line with that part of the policy that says that when we evaluate dividends, we also look at the efficiency of the total balance sheet. We are maintaining our financial and operational goals or ambitions. We aim to deliver like-for-like growth above the market. We aim to open on average five new stores net a year. We aim to increase our EBITDA margin over time, we also aim to maintain a dividend payout of 50%-60% of net profit while maintaining an efficient balance sheet. This might not seem that interesting at first glance, but if we look at what has happened since the last Capital Markets Day, I would argue to say that this strategy has served us well. With that, I will leave the floor to Espen for some final conclusions. Thank you.
Thank you, Stina, and also thank you to Andreas and Renate for excellent presentations. Yeah, I think it's time to summarize and have a full look at our journey From Good to Great. The Europris strategy remains, you know, for the large part the same, which I still believe that is quite good and will make us great. We have a clear strategy on what we're going to do forward. We will strengthen the price and cost position. As you saw from Stina's presentation, we are hedging all costs beyond our control, and we will continue to chase improvements in everything we do in the ways we are working. Working with cost effectiveness will be extremely important going forward.
Of course, we continue the sourcing partnership we have with Tokmanni and ÖoB to ensure that we have the lowest possible purchase price on the goods we buy. You know, to be honest, I truly believe that the winners in future retail, that will not necessarily be those who has the lowest selling price, but I believe it will be those who have the lowest costs. I think what you heard from Andreas, that is music to me, that, you know, working operational efficiency, work on how you use your cost, make sure that you are profitable. That is one of the most important assets of Europris, and we will continue to be focused on the cost side and the profitability and improving customer experience, of course, you know, that's why the customer should come to us.
You saw Boye presenting, you know, every little tweak of what we are doing. When you walk into the store, you might think that, you know, it's a little bit, you know, surprising chaos what's happening here, but it's a thought behind everything you see. You know, nothing is left, you know, to itself. It's all planned, and it's all in the details. We will continue to drive growth, drive traffic by working on the categories. Of course, execution in the stores, you know, and the staff we have, that will be key to the success also going forward. That we maintain a high standard in the stores, making sure it's attractive to come there, they implement the concept and work hard like they have done over the past years.
On driving customer growth, we will continue to open new stores, we will also continue to work on the digital space like Renate talked about with the digital customer, working with the customer club and using all the data and the insights we now get to make us more interesting for the customers, make it more personalized for them, so they actually have a good reason to go. That is going to be important. As Renate said, we will act responsibly. Of course, you know, that goes without saying that's something we have done. We are putting more focus on this and actually putting things out as a standalone strategic objective. We have committed now to science-based sustainability targets. That was actually quite a large step for AutoStore to make that commitment.
We are doing this as part of society, and we're doing this in collaboration with others. That I think is a tremendous job that is done. You see how we work together with ASKO. Of course, they are a competitor when it comes to the stores. You know, we're competing. We have agreed that, you know, on the distribution of goods, you know, we should actually collaborate to make sure that we give a sustainable transport of the goods to the stores. This, you know, this is joint effort from the society. It's not something we as a company do alone. As Renate said, I think, you know, sustainability is also an opportunity.
We always seek opportunities in AutoStore, and of course, I want us to take a position as the retailer that makes sustainable products affordable for everyone. I think that position is up for grabs, and we have to work hard in order to take it right away. Yeah, moving too fast. The local hero, that is in my terms, you know, the hidden gem in the, in the road From Good to Great. We want to be a positive contributor in the local communities. That is something that can really differentiate us from other retailers, especially the onliners. You know, with the network we have with stores, how we can connect and interact with the communities, I think that is a big asset that's going to drive growth going forward.
Of course, you know, when it comes to concept, you know, the commercial offering, the sourcing, how we work with the concept, there we will be one strong national chain. When it comes to execution and the people, there I want the customers to meet 276 local stores in their own community. That's how we can make a difference. I truly believe that we can locally engage with the communities, and we can hire locally, we will collaborate locally with different organizations, and making sure that our store staff will be a place where the customers will they come and meet, and the customers will be welcome. Going to stores, you know, might be for the audience today, not be something you do with a great pleasure, and you not to spend too much time in the stores.
It's a lot of people out there that actually this is an important, you know, part of everyday life, and part of the social life, and that is something you cannot, you know, get online. You actually have to do that in the physical stores. You know, I see that we actually have some time. I'll share a very short story at the end. On Black Friday this week, all the management in AutoStore went out to work in the stores. I went to a store in Trysil, and I was there working there together with the store manager, Mia, and we were standing in the handyman section, and suddenly a customer approaches and say, you know, "Hi, Mia, how are you?
I see that you have a new employee today." Yeah, of course, we ended up standing there talking for like 10 minutes because, you know, that customer, she knew all the staff in the store. You know, that store manager, she knows her customers, you know. If you wanna know what's going on in a store, you know, talk to the people. You know? That's how you find out what's going on. You know, that kind of feeling, you know, being that part of that is quite important. You know, I was welcomed as the new employee. You know, that was great. I truly enjoyed that. Okay. I hope you have enjoyed today's presentations. For the final wrap-up, I would like to give you just five key takeaways.
If you take this with you, I think we have, you know, accomplished our mission with the meetings today. AutoStore is a clear market leader in a growing market segment. We have a strong track record with 30 years of consecutive growth. We are a well-managed company with a proven ability to adapt to changing market conditions. We have presented today a clear operational and financial strategy, we are truly committed to profitable growth and cash distribution of excess cash. With those final remarks, I think I will invite Renate and Stina to join me on stage for the Q&A session. The Q&A session will be moderated by Trine, our ER officer.
We will take questions from the audience here in the room first, and then we will take questions from the web listeners. If someone has, you know, very detailed questions about Lekekassen and to Andreas, we will note them down and we will get in contact with you later on. I think that with that, we will open up for questions. Yeah, you will get a microphone.
Thank you. Thank you for the presentation. Markus Heiberg from Kepler Cheuvreux. One question from me, and it's maybe several parts, but how do you think about the traffic versus the basket size in a down trading environment? Obviously, you benefit somewhat from it, but can you also shed some light on gross profit per product in your consumables and in private labels compared with other kind of products? Could this be a opportunity, or is it a headwind for you?
I think it's always an opportunity. Of course, you point at something right, and the basket, you know, in the current environment, you know, the growth in the basket is driven by inflation. You know, that's the fact for everyone. That's the way it is. I think trading downwards that you see higher share of private labels, Private labels has a higher margin, period, but also a lower sales value. It serves the purpose. It gives, you know, the consumers more value for money. I think, you shouldn't, you know, see that as a guiding either or the one or the other way in terms of how the margin will be impacted.
Of course, the sales now is driven by lower priced items and of course, the growth in the basket will be driven by inflation.
Okay. Just a short follow-up. Your assumption of higher gross margins going forward than pre-COVID, does that account for this effect that you will have more consumables, presumably, going forward?
I think you have to look everything over time. Of course, if you look at, you know, I think the first quarter of next year might be quite tough for consumers, and maybe that quarter you could see a somewhat different, gross margin development. You have to look at this a little bit more long term. Long term, I am sure that we will deliver gross margin above the pre-pandemic levels. We will continue to work on the product development with the private label products. Of course, that, the sales of high ticket items will come back as well at one point. We are in this for the long run. At currently we see a good margin.
How it will be, you know, going forward, it's a little bit difficult to say for the short term.
Thank you.
Thank you for a good presentation. Europris has, as you stated, more than 30 years of revenue growth. Looking at consensus next year, there is, you know, marginal growth. How do you see your strategy sort of fits with the market landscape that you see for 2023? Should you be doing a lot better, or how can you reflect on that?
I think we are very well positioned in today's market. Economy is getting tougher. They are getting more price conscious, and of course, being in the low price segment is positive for us. We've seen that in the start of the, of the fourth quarter. We are becoming more, you know, important for the consumers. We see that we are selling more private label products. We see that our campaigns still work. I think, you know, in the current environment, that should be positive for a company like Europris.
The very strong Q4 sales or October and November sales that you had this quarter. Was that your sort of expectations, and how do you see that there relative to what you should expect going into next year?
Like we said when we presented the third quarter, we had the positive development throughout the quarter. It was starting with negative numbers in July, which was heavily impacted by lower sales of summer seasonal items. We saw growth throughout the quarter, and that continued now into the 4th quarter. You know, in that terms, it was expected. I think, you know, what will happen next year, we'll wait and see. I think we are well positioned, and, you know, what we have tried to explain is that, you know, we are working with these tools, you know. When we see that, you know, the market is shifting, you know, we try to adapt, and we take the opportunity, and we look at what can we do.
We have, you know, shifted the focus towards more consumables, towards more low price points, and, you know, that's exactly what we will continue. If we see that the demand changes, you know, the market is changing, we will try to adapt and find a way to benefit.
Final question from me. You know, since the last Capital Markets Day, you're growing your private label share from 35%- 40%. Where do you see the sort of level ending up in three years from now? Have you reached the sort of maximum potential there, or should you expecting more from that?
We don't have a target of this or that percentage. We work with these products and if the demand is there and for our products as well. Of course, we don't mind selling those products, but it's important to have the mix of the brands and our private labels and no concrete target to increase to this or that level. We will work to deliver good private label that people want.
Okay, thank you.
Hi. Petter from ABG. Follow up on Markus' question here on the gross margin. We see that many retailers are seeing higher inventory levels, and it also seems that campaign activity has been picking up. Can you share some lights on how you see the inventory level in the value chain and also the campaign activity? Thanks.
If I start with the inventory level, as we said, we have had higher inventories, and this is largely impacted by inflation, but also from volumes of seasonal items. Inflation affects both seasonal items and the overall assortment. What we have been very careful to do is to sell out any seasonal items that are not to be continued for the next year. Our inventory is healthy, and it is products that are still very much sellable for the next season. We're not concerned about that short term kind of in-increase there. Your next question, sorry, was about?
Yeah. That was just overall on the campaign activity and how you see that in the market now versus, let's say, a couple of years ago or a normalized situation back in 2019. Thanks.
Well, we have seen that the share of sales from the front page of this leaflet has increased since the last Capital Markets Day. Of course, people are more price conscious, and they are coming for the campaigns. What we also, of course, have focused on is to use this as a way to get people into the stores and then to also shop more. I can't predict if it will go even further up or if it will stabilize or go down again. We try to use it to kind of get at least the traffic, and then hopefully they pick a lot more than just what's on the front page.
I think it's also fair to say that the campaign intensity in the market in general, you know, this Christmas has been crazy. I've never seen Christmas season starting so early with 40%- 50% discount on basically everything. I think what Stina presented earlier, you know, with the financial flexibility we have, the storage capacity we have, you know, we actually take those, you know, sales decisions based on what we think is business sense, you know, for us long term. What we see currently in the market that a lot of retailers are taking, you know, the decisions on the sales activities based on, you know, the covenant demand from the banks or the physical storage capacity they have at the warehouse.
Of course, many are overstocked at the moment and that takes, you know, another season to clear out. Yeah, no more questions? Yeah.
Inflation has been quite high this year. How do you see inflation going into next year for your selling prices?
I think we still have some inflation ahead of us. We've seen that in negotiations with supplier this autumn that still there are price increases to come. We are also at the same time seeing that some prices have started to come down, especially those from the Far East, reflecting first of all in the freight agreements. Of course, that also reflects that it's, you know, more capacity available in China for production. It's a little bit mixed. I think you will see still inflation on locally sourced, you know, European products, but you might see the different picture for products from Far East.
I have two questions. One, the situation on China and the COVID lockdown, how is that affecting your value chain into Europris?
So far, I think we have managed quite well. We have close to 30 people on ground in China working there. Of course, they have had limited flexibility to travel over the past years, but, you know, they are working digital, and that has served us well. We have actually, you know, got all the goods we need during this period. You know, for those employees, it has been extremely tough, and we follow up, you know, their situation very closely. I think they have been in lockdown for more than less than, you know, one-third of the year so far, and it's still a difficult situation in the Shanghai area. For those employees, you know, we care a lot, and that situation is difficult.
Product-wise, we got the products we need, and we have been able to also do all these category upgrades and tweaks, despite this situation with us actually not being able to go to China for two years.
My second question also partly alludes to inflation, and that has to do with the growth, right? If you inflation adjusts your growth, it's actually, I can't remember exactly the figures, it seems that you, in real terms, are decreasing. How do you think your real results will be affected that, I mean, you're really not growing in real terms, you're actually declining going forward?
I think it's if you have to look at this a little bit long term. If you look back to from 2019, of course, we've had volume growth and not only inflated growth. But if you compare with last year, I totally agree with you. The growth we have, you know, this so far this year is limited and of course, inflation driven. Volume-wise, it's a decline. That is a natural effect, I think, of the fact that consumers are, you know, getting less money to spend. The banks want more for their interest, you know, It's more taxes for many people, and at the same time, electricity prices and food prices are increasing. Then you have less to spend, and you will spend your money differently.
If you compare to last year, people could not travel abroad, they could not go to restaurants. There were, you know, no parties, no fun. This year, you know, they are spending all the money in that way. You know, of course it's a big fight for the consumer's wallet.
Again, how will it affect the real results going forward? You're like a politician, you are not answering questions.
It was a good answer.
Yeah, it is.
I think it's, of course, you know, what we are working on is what we have tried to explain here today. You know, it's all about the costs, how we work on that. Obviously, you know, with the higher freight costs, that will impact the margin. We have said that the margin you should expect to go a little bit down. If you look at the estimates out there, it's all reflected in those numbers, and everybody is expecting that. I think it's no news to what we have already communicated to the market.
Just a follow-up from me, sort of bundling a couple of questions here. With the inflationary environment you're seeing, I mean, you commented that products from Far East is becoming cheaper at the same time as you have freight rates coming down. On your inventory of items from the Far East, do you see that the items that you have purchased are have better prices than what you currently see in the market? Combining both the right element and the cost.
Obviously the goods we have purchased this year will have a higher cost than what it will be to buy those goods next year. So that goes without saying. If I think, you know, it takes an inventory churn, like Stina said, to get the benefits of the new agreements. Luckily, you know, we are not the only company that source products from the Far East. Our competitors do the same. We see from the sales activities that they have the same issues like us with the inventory. We are not alone. Usually we see that prices going up tends to be a little bit more sticky than prices going down. I think, you know, the market will actually, you know, moderate this quite well.
We've seen that in the past, and I believe that to be the case now as well.
No impact on your storage?
No. No, no, not necessary for that. Okay, Trine, any questions from the web? One question from the back. Actually, two.
Just to follow up, because we haven't talked too much about the OpEx ratio. It's obviously it's very difficult to know because you don't know the revenue for next year and you don't. You have better visibility for cost growth, right? It's not as easy potentially to increase prices next year. What kind of cost ratio should we be looking at? Will you do initiatives to take down your cost if you see that revenue growth is below budget? You see a lot of retailers now are cutting costs. How should we think about this?
We always work to have a cost efficient base. A lot of our cost base is kind of already fixed, as we said, with the 60% going to salaries and other employee benefits. We also have the rent, which is what it is. For everything we do also with the inventory and the warehouse, I mean, sorry, we are working all the way to be more flexible. Of course, if we need to take additional actions, we will look into that. We also hope, and as we have shown at least so far, that we are a very relevant player in this environment. We haven't any plans to initiate anything extraordinary unless we need, are in a situation where we need to do that.
Thank you.
Hi. Kristoffer Pedersen, Nordea. You mentioned that it will take some time until the new freight agreement comes into effect fully on the P&L. Are you able to give an estimate on how long it will take? Is like one or two quarters or...?
I don't want to be exactly specific on it, but we have, as we also said, we have higher volumes left from the season that has been, and that obviously has to turn. I'm not gonna give you an exact answer, but everything that is shipped that we after the 1st of January has that new rate. Again, we have to turn what we already have. A little bit of time you should expect.
Okay, thanks.
Trine?
Yes. One question from the web here. Alexander Forbrig asks on an update on the ÖoB transaction.
We have not given an update this time. We gave an update on the when we did the Q3 numbers, a little bit more than a month ago. That is that we are still, you know, not agreeing on the 2019 EBITDA, which will settle the purchase price. We need to settle that, and that is scheduled for an arbitration to be held in the third quarter next year. It's still pushed ahead of us. But I think, you know, obviously the strategic reasoning behind the transaction is still there, but we have no reason to settle it before we know the price.
The last question from the web. ...
Okay. Thank you very much for your questions. I think now we will actually leave the floor to Jeroen to give us some international perspectives on the discount retail markets. Please, the stage is yours.