Retail

Eurocash Posts 10% Sales Increase, Driven By Acquisitions

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Poland's Eurocash Group has reported sales of nearly PLN 23.3 billion in 2017, representing growth of 10% compared to the previous year.

The retail group says that the key revenue growth driver was the consolidation of companies acquired at the end of 2016 and the start of 2017.

Gross profits on sales were up by 15% year on year to PLN 2.44 billion, driven by higher gross margins in the retail segment, however, net profit fell from PLN 190 million in 2016 to PLN 85 million, due to higher finance costs.

During the year, 55 recently-acquired EKO supermarkets were rebranded as Delikatesy Centrum stores, in addition to another 30 new openings, bringing the total number of Delikatesy Centrum outlets to 1,171 by the end of 2017.

“In 2017, we recorded sales growth in each of our segments," said Jacek Owczarek, chief finance officer of Eurocash Group.

"The strongest growth was in the retail segment, where it was driven by acquisitions, especially the EKO supermarket chain. However, the cost to integrate these sites with Delikatesy Centrum is having a short-term impact on the Group’s profitability.”

Future Growth

Over the next five years, Eurocash Group plans to open approximately 900 new stores, with an investment of PLN 1-2 billion.

In addition to the group's acquisition of Mila, which is still awaiting clearance from competition authorities, this should bring the retailer's network to a total of 2,400 supermarkets across Poland.

In its wholesale business, the company says that it will focus on integrating specific business units and sharing the best solutions developed in each format to reduce costs and improve efficiency going forward.

The group is also developing new retail formats, such as Duży Ben liquor stores, which are currently being expanded across Poland.

Through its franchise and partner networks, Eurocash is one of the leading retail companies in Poland, with over 14,000 independent stores operating under brands such as ABC, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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