Italy's Esselunga Sees Higher Turnover, Lower Profits
Italian supermarket chain Esselunga has reported sales of €7.91 billion in full-year 2018, an increase of 2.1% on the previous year.
Growth was achieved without increasing shelf prices, despite an increase in costs by suppliers, the retailer said in a statement.
Esselunga said that it has retained a leadership position in Italy in terms of value for money, with prices 3% below the market average. It has also continued to invest in promotional activities.
The large-scale retail trade in Italy has been affected by competition from discount stores and by new consumer purchasing patterns. In the vicinity of Esselunga supermarkets, around 60 discount stores were opened last year, the retailer said.
Profits at the group fell 6.27%, from €305.8 million to €286.6 million, while net debt was €435.7 million (down from €847.5 million as of 31 December 2017).
Capital expenditure amounted to €319.5 million, of which €290.4 million was invested in property, plants and equipment.
The e-commerce segment continued to grow for the retailer, reporting sales growth of 28.3% to €236 million.
Esselunga is also expanding the range of products offered through its 'Clicca e vai', or 'Drive' stores.
Three Esselunga outlets were opened in 2018; in Pistoia Porta Nuova (with the closure of the Viale Matteotti store), Vimercate and Milano Famagosta. The Verona Corso Milano store was opened again after full renovation and expansion.
As of year-end, Esselunga’s network comprised of 158 stores in Lombardy, Liguria, Veneto, Piedmont, Emilia Romagna, Tuscany and Lazio. In addition, the group manages 93 Atlantic restaurants and 38 selected perfume shops under the EsserBella banner. It is also engaged in the real estate sector.
New Chief Executive
Announcing its results, Esselunga said that Same Kahale, who has been with the company since 2018 as general manager, will succeed the current CEO of the group, Carlo Salza, at the end of the year. Salza will become president of the operation.
Looking ahead, Esselunga said that it plans to continue investing in product quality and price competitiveness to maintain its leadership position.
© 2019 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