Slovenia-based retailer Mercator Group ended the first quarter of the year with an operating profit of €12.2m, a three-fold increase on Q1 2014, resulting from higher revenue and lower costs.
Net profit for the period amounted to €4.1m, while revenue reached €628.7m, up 0.6% year on year. Total investments amounted to €6.7m.
The structure of revenue by country changed notably, as a result of consolidation within Croatia’s Agrokor Group. Following the transfer of Idea retail units to Mercator, the Group generated 35.2% of its total revenue in Serbia (previously 20%). The share of revenue in less profitable markets decreased considerably - in Croatia from 11.2% to 2.7% and in Bosnia and Herzegovina from 7.1% to 1.1% - as a result of the transfer of Mercator retail units to Konzum. There were no changes in Montenegro, with share of revenue stable at 3.3%.
Diversification of store formats thus remains the key strategy for growth. Mercator Group more than doubled investments to adapt its store network in Slovenia and a new concept for a larger store format was introduced. Major refurbishments of stores will take place in 2015, with a focus on smaller neighbourhood stores that offer fresh produce and a broader selection of ready-made food and pre-packed fresh products.
Mercator Group’s acquisition of Era Good should increase the volume and scope of the FMCG wholesale offer, as well as improve business efficiency and competitiveness in this market segment, the retailer said.
In the quarter, four new retail units were opened (one in Croatia, three in Serbia).
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic