Italy’s Gruppo Pam is preparing a series of measures to reconfigure its operations, after closing 2021 with losses of €16.8 million, according to Distribuzione Moderna.
Hypermarket sales were in the red for €25 million and superstores achieved a loss of €1.7 million, with only Pam’s supermarket arm in the black (€5.7 million).
In the first quarter of 2022, sales dropped by €15 million, and margin by €4.7 million, the retailer noted.
The results were impacted heavily by high energy bills, with utility costs amounting to €6.8 million in the first quarter and likely to reach €17 million by the end of 2022.
A New Store Concept
Pam hopes to reverse the negative trend in the hypermarket segment by rethinking the store concept. It noted that non-food sales have been particularly unprofitable in recent quarters.
The plan is to reduce the sales area and offer two types of hypermarket formats: a reduced format of 3,500 square metres, and a larger format of 5,000 square metres.
The surplus sales area would be leased to third parties specialising in non-food, or those affiliated with specialised operators.
Read More: Pam Panorama Launches Online Portal For Suppliers
Commercial Policy
As well as reformatting the hypermarket segment, the relaunch plan will also include changes to commercial policy and operational management, according to director general Andrea Zoratti.
After initiating collective dismissal proceedings for 255 employees in March, more redundancies are also likely, the group noted.
Pam operates 970 stores under different formats – Pam Panorama hypermarkets, Pam supermarkets and superstores, Pam Local convenience stores, and Pam City urban proximity stores – of which many are franchised operations. It also operates 470 In’s discount stores.
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