Italian supermarket chain Esselunga is aiming for a turnover of €9 billion this year, with gross margin of between €750 and €800 million, reports La Repubblica.
Some 70% of its turnover is expected to be achieved in Italy’s richest region, Lombardy, where its market share is 21.4%, compared to 9% nationally. Overall, the retailer generated revenue of €8.6 billion in 2016.
According to S&P, Esselunga has the highest profitability in the sector, thanks to a profit margin and revenue ratio of 8-9%, with €1.8 billion of debts.
Meanwhile, Moody's calculates that the retailer’s debts at the end of the year will be reduced to €1.3 billion, thanks to improved cash flow.
Retail Advantage
Esselunga has managed to increase margins more than its rivals, thanks to low prices on essential goods and for its medium-high end market positioning.
Additionally, the company also owns the land and areas where it stores are located, enabling it to reach locations that are cost-prohibitive for other companies.
Italian grocery shoppers spend an average of €1,528 per year in Esselunga stores, making the chain supermarket with the highest per-customer earnings, according to a Nielsen report released last month.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
