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Retail

Jerónimo Martins Posts 7.2% Sales Increase In 2016

Portuguese retailer Jerónimo Martins has announced an increase of 7.2% in like-for-like sales for the year 2016.

Group sales reached €14.6 billion, 6.5% over 2015 (taking currency fluctuations into account).

Revenue (in local currency) increased for all five of its banners: Polish banners Biedronka (+9.5% like-for-like) and Hebe (+27.5%); Portuguese stores Pingo Doce (+1.2% like-for-like, excluding fuel) and Recheio (+5% like-for-like); and Ara in Colombia (+110.2%).

Net profit totalled €593 million, up 14.5% on 2015, excluding the impact of the sale of its Monterroio manufacturing and services subsidiary.

"Demanding Targets"

Chairman and CEO Pedro Soares dos Santos commented on the results, "2016 was a year of delivery of the demanding targets set by the group".

"The renewed focus on the consumer in all banners was accompanied by solid progression of the group's profitability. After a year of strong performance, we entered 2017 determined to continue to grow in a profitable and sustainable way".

He said that Pingo Doce and Recheio, the company's banners in Portugal, drove up investment in the 'attractiveness of their value propositions", improving market share gains.

Polish banner Biedronka benefited from a 'more favourable consumption environment' after a full review of its offer and organisational structure.

In Colombia, where the retailer has been operating for three years, advanced market knowledge and consideration of different consumer profiles across regions led the company to strengthen its infrastructure and prepare to ramp up the rate of expansion.

Looking Forward

In 2017, the retailer said it will keep up its promotional intensity, and doesn't expect costs to decrease, especially labour expenses.

In Poland, Biedronka will concentrate on growing average basket spend, while the company plans to open 100 new stores (net) this year.

Pingo Doce will focus on improving store operation in Portugal, and Recheio will look to enhance its multi-channel proposition.

Jerónimo Martins' South American branch in Colombia will keep optimising personnel and logistics to prepare for expansion, and is expected to open at least 150 new stores in 2017.

Ara and Hebe's losses will increase over 2017, mostly due to Ara's expansion strategy. In 2016, combined losses for the two banners were €62 million at the EBITDA level, with Ara accounting for more than two-thirds of the downturn.

The capital investment programme for this year is expected to total roughly €700 million, with new distribution centres planned for Poland and Portugal, and three in Colombia.

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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