Welcome to this webcast where we will present the Q1 results for Auropies. I'm Espen Elgagal, and together with me today, I have 3 in Englakken that will facilitate the questions that come in from the web audience. Aeropis is the number one discount variety retailer in Norway. We have said that for quite some time, but in the Q1, it really became a truth. AVOPIS has proven the important role the company plays for both our customers and the Norwegian community.
At the critical time, we have provided Norway with necessary goods to keep the everyday life going for most people. With our wide range of products at low prices and the unique store network across the country, we have been able to play an important role in the society. That makes us proud in our office, and I'm very pleased with the efforts our employees have done to make this possible. Aeropis is also a growth story. And since the opening of the first store back in 1992, the company has grown every single year in both financially good times and in more challenging periods.
2019 was a relative soft year for Norwegian retail, but Auropis delivered solid growth, and we see that, that trend continued into the Q1 of 2020. In the Q1, AVODROPIS had a growth of 11.8% with a like for like growth of 10.4%, partly driven by increased sales following COVID-nineteen. The gross margin was reduced by 1% point owing to sales mix change towards groceries and other necessities. Adjusted EBITDA rose by 21.3% and profits were also positively impacted by unrealized currency gains, more or less a reversal of the negative effect we saw at year end. In connection with the refinancing, we booked 1 off cost of NOK 8,000,000 in the finance.
And at the end of the quarter, we have a solid financial position with cash and available credits of nearly SEK 1,000,000,000. Inventory, which was an issue last year, has been reduced by SEK145 1,000,000 since the Q1 last year. During COVID-nineteen, safeguarding employees and operations has remained our top priority. We initiated crisis management plans already in January. Firstly, to secure our employees at the Shanghai purchasing office and also to secure delivery and production of goods from the Far East.
As the pandemic spread globally, we strengthened the crisis management and implemented a number of measures locally. First of all, Aeropis adheres to the guidelines issued by the Norwegian Institute of Public Health at all times. We have initiated several measures in the routines and also improve frequency of cleaning of all stores and also at head office and warehouses. We have initiated store strict procedures in case of outbreaks to ensure quick and safe reopening of stores. So far, we've had virus outbreaks in 2 of our stores.
Both are reopened. We maintained a close dialogue with suppliers to safeguard flow of goods, and so far, only minor delays has been recorded. On the sales side, we saw early indications to lower customer traffic with larger baskets. The 1st week after the national measures were introduced was marked by hoarding. The hoarding basically took place for a small week, and that ended soon.
And after that, I've actually never seen such a clear change in customer buying patterns in such a short period of time. We see less traffic in city center stores and also at shopping centers, while suburban stores and retail park stores and of course, especially those to the Swedish borders are experiencing a very positive development, both in basket size but also in customer traffic. We have one barter store that is actually performing below normal, and that is the store in Acherikines where the Russians now are not coming into Norway to do their shopping. But we've seen very big deviations. Of course, the mountain stores has been struggling, but the suburban stores and especially in the southern part of Norway has performed very well.
The geographical area where we see less changes in sales is actually in the northern part of Norway. Also in the wake of COVID-nineteen and the oil price fall, we've seen large currency fluctuations. Aeropis follow the currency hedging strategy and secure all placed purchase orders in dollars and euros for 6 months. Historically, this has provided sufficient time to adjust retail sales prices. In addition, we renegotiate prices wherever possible, especially for those suppliers that do not have their cost base in U.
S. Dollars or euros, and that also applies to purchase orders we have already placed. Looking at sales performance in the Q1, that was strong. Total retail sales growth of 12%, and we saw good merchandising in the early months and a positive impact from the effects of COVID-nineteen in the end of the quarter. We continue the strong focus we've had on implementation of campaigns throughout the value chain.
This is high on the agenda, both in supply chain and in the stores. As we said in late January when we presented the Q4 of last year, we had a negative start to the year. This was caused by an exceptionally mild winter and required swift actions. Aerofis operates a seasonal concept, and we used the seasonal products to attract customer traffic to our stores. And that meant we had to make a significant change in product selection and marketing to turn the negative trend.
We shifted the focus from seasonal products and concepts to groceries and necessities. This was a successful change, and we regained customer traffic and sales growth. This underpins the value of having a wide range of products and an organization that is used to quick transitions from one season to another. With the COVID-nineteen outbreak, our employees have shown a pharma double commitment. They've quickly adapted to new guidelines and changes in customer behavior.
When we look at the market figures, the market was down by 4% in the quarter and with a like for like of minus 4.4%. Our growth exceeds the market by far, but the comparison is not really fair. We have kept all our stores open, but the market data is based on shopping center data where many stores have closed and they have experienced significant reduction in traffic. So for the moment, the market benchmark is not really telling the exact story. But we believe that overall, we have been far above market in the Q1.
Gross margin in the quarter was 40.4%. That was a reduction of 1% point from last year, and that was due to the change in product mix towards groceries. Gross profit, on the other side, increased by 8.9% from the higher sales. Operating expenses was BRL406 1,000,000, up by 5% from last year, which corresponds to the increase we had in directly operated stores. Last year was negatively affected by $11,000,000 owing to the high fill rate at the central warehouse.
In percent of sales, the OpEx was reduced from 31.3% to 29.4%. That means that we have been able to tackle the increase in sales in our stores without adding additional costs. Adjusted EBITDA was €152,000,000 an increase of 21.3 percent from last year. Remember that the Q1 is our smallest quarter in both in terms of sales and profits, but we are pleased to see the increase in EBITDA margin to 11% in the quarter. Net change in working capital was negative in the period following a normal buildup of inventory ahead of the summer season.
Overall, inventory has been significantly reduced from last year as we have improved the flow of incoming goods where we had some issues last year. The refinancing was completed in January, and we now have a term loan of SEK 1,000,000,000 and RCF of SEK 1,200,000,000 and an overdraft facility of SEK200 1,000,000. Cash and liquidity reserves at the end of the quarter was close to SEK1 1,000,000,000. Eurowie's key strategic initiatives are to strengthen the price and cost position, to improve the customer experience and to drive customer growth. Let's have a look at the progress we made in the Q1 this year.
Starting with the price and cost position. We are in progress with the new warehouse as planned. Operation was started in the Haibay area in February, and at the end of the quarter, lease expires at the 2 smaller warehouses and the 2nd largest warehouse in Frederiksdag. There are no changes to other milestones, and we maintain our savings target for the project that come after the period of transition we are in. When we look at the automatic highway warehouse, that will increase the capacity significantly at the new center warehouse.
It became operational in February, and the storage capacity at the new center warehouse increased from 34,000 to 99,000 pallet places. Operations will be scaled up gradually, and full operation is expected before the summer. The relocation process of 2 existing warehouses accelerate was accelerated as a result of the increased capacity. We have one issue on the automated picking solution in the Loeb area that has been delayed due COVID-nineteen. The testing was scheduled to start in late June but has now been postponed.
But the delay is so far within the The sourcing partnership with TOKMANI and OOBE continue to make progress, and the key activity in the Q1 has been joint purchasing of Christmas goods for the season 2020, and we continue to work on joint private label products. We also give an operational and sales update on OBE. The new CEO of OBE, Magnus Carlsson, joined the company on the 1st March. Magnus comes from the position as CEO of Vraeta and Convenience in Sweden, a very experienced retailer and a great operational focus. Like Outofice, OBS saw a positive sales development in the quarter.
They had a 10% like for like growth. And like us, they also saw a slow start to the quarter and a significant sales increase in the wake of COVID-nineteen outbreak. At the end of March, all stores were kept open, but OOBE will consider to close stores experiencing significantly lower customer traffic. And Oeyobi has seen the same thing as us when it comes to this basket size. They've seen that the growth is mainly driven by the increase in the basket, and they also see an increase in the grocery part of the categories.
And the latter has a negative effect on gross margin, but overall, the gross profit has increased as a result of the increase in sales. After the quarter in April, OBE has closed one store that is in Charlottenberg in close to the Norwegian border, and OBE is actually experiencing the exact opposite effect of what we saw towards see towards the Swedish border. We see huge sales growth, and they see, of course, the totally opposite. On improving the customer experience, concept and category development is the key for Audiopies, and continuous improvement of concept and category is the backbone and will be a very important driver for sales growth going forward. In the Q1, we have introduced the price concept chef in all our stores.
I think the timing couldn't be better now as everyone has more time at home in their own kitchen as a result of COVID-nineteen. That's also reflected in the first sales figures we have seen from the new upgrade. We have introduced a more distinct shop in shop solution where display of kitchen products has been significantly improved. In addition, we have introduced a clear good, better, best strategy for pots and pans using both well known brands and private label products. And there will be more category initiatives in the coming quarters.
On the e commerce, we continue to make progress, and the focus in the Q1 has been to recruit more members to our customer club, Mer. Since year end, we have increased the membership base by 65%, and we're getting very close to our target of 500,000 members before the summer. Most of the new members, they register the credit cards and give us permission to use the purchase history for analytics and personal marketing. Since COVID-nineteen, we have used digital marketing and ECRM to regain customer traffic for stores that experienced a negative trend. For most of these stores, we were successful, and the stores performed above average in the following weeks.
I think this underlined the value of continuously developing good eCRM solutions and to use targeted digital marketing. The new e commerce solution, which was scheduled for launch in the Q1, was delayed for technical issues, but we enjoyed a successful launch on Tuesday this week. E Commerce will serve as a complementary source for revenue growth and combined with ECRM, we may attract new customers, both online and drive traffic to the physical stores. An important drive for customer growth is to utilize the opportunities we have in the existing store base as well as the opening of new stores. The potential of improving existing stores is considerable, and we see that we are constantly being offered better locations to attractive rental levels.
During the Q1, we have opened 1 new store. We have relocated 1 store and we have completed 2 store expansions. We have 4 new stores in the pipeline for 2020 and beyond, but see a potential for several new stores in Norway. We still believe that rent levels are high and that landlords will have to change their terms in the time to come. The potential closing of the store at Grine has been postponed due to COVID-nineteen.
The hearing in the District Court was scheduled for April and is now rescheduled to October 2020. I think it's time to summarize. The strong sales trend we experienced in the wake of COVID-nineteen has continued in the beginning of April. We see an increase in the shopping basket, while the number of customers has normalized after the week of hoarding. It's too early to draw conclusions about the long term financial effects of the current situation.
Like I already commented, the new e commerce platform has now been launched, and we have a pipeline of 4 new stores for 2020 and beyond. 1 franchise stores was taken over on 1st April, and we expect another 1 to 2 takeovers for 2020. On OBE transaction, we expect to receive OBE's 2019 financials at the start of May. And with that, we will start our due diligence process. Assuming that we agree on the 2019 EBITDA within the 30 day deadline, the 6 month option period will start in June and end in December.
Aeropiece is well positioned as Norway's number 1 in the sector with ample opportunities and the financial position to continue our profitable growth journey. The important summer season that's now ahead of us, and we are well prepared for a summer season where many Norwegians will spend their summer holiday at home in their own gardens, by the sea in their cabins or in the mountains. Our ambition remains the same, be the best discount variety retailer in Norway. And with that, Trina, I think we will open up for questions from the web audience.
Yes. There are some questions on the web. The first one is from Garde Oelvik, Vareto. Can you comment on the sales mix so far in April? You say that basket size is still high.
Is this still driven by groceries? Or do you have more normalizing buying patterns?
It's still driven by more groceries. So the we see the same trend, but not to the same extreme extent as we saw during the hoarding. The hoarding was 1 week, short period, extreme share of groceries. Now it's still the higher share, but it's not that significant.
Next question is Eivind Mosse Gas, Baierbanc End Markets. You went out of Q2 2019 with higher than normal inventories and now refers to normal inventory buildup ahead of the summer season. Does this mean that you predict higher than normal demand through Q2 and Q3?
No, it doesn't. We have increased the inventory from year end. So that's the normal buildup we have. But we have, of course, when we place the purchase orders for summer season 2020, we have taken into consideration that we bought too much last year, and we already had that on stock. So we have planned for a normal season.
And that might mean that we will be sold out of some products.
And here's a question from Ulla Martin Vescoy, DNB Markets. 1, when you look at your customer traffic, do you need customers? Do you see new customers? Or is this existing customers that have increased basket? And the second one, how was like for like in March relative to February January?
And how should we think about the March like for like relative to what you're seeing in April?
That was extremely long questions.
You can take the first one first. When you look at your customer traffic, do you see new customers? Or is this existing customers that have increased basket?
It's we don't have good data to see if it's new customers. We see that we get some new members in our customer club, but we don't know if they have been customers before. So it's not that easy to say. But we believe that overall, we don't get that many new customers, but the existing customers are buying more. But of course, some new as well.
And number 2 was how was like for like in March relative to February January? And how should we think about the March like for like relative to what you're seeing in April?
As we said back in January, we had a negative start to the year. So that means January was very low. We made some significant changes to our product mix and the offering and how we operate the stores in February, and we saw a very positive result from that with increased customer traffic and also increasing sales. So February was very positive. And also then after the national measures was implemented on the 12th March, we saw significant increase in sales.
So in terms of if you should split the quarter, January was low. February was good. And of course, March was a little bit extreme. And if you try to see how that will develop going forward, it's very early days. We've completed some 20 days into April, and we have Easter in there.
So it's a lot of normal activities that makes it impossible really to say how we should measure it. But it's we see overall increase in sales in April so far, and that is driven by the higher baskets.
And then comes one more question. It's from Carl Fredrik Bjerike. Is it possible to provide some detail on e commerce sales in Q1 2020?
E commerce sales is still from a very low base. So we don't think it's really valuable to comment on those figures. Let's have the new e commerce platform starting up and see some time operation, and then we will come back with figures.
No more questions on the web.
Okay. Thank you.