Slovenian retailer Mercator has reported a drop in both revenue and net profit for the first nine months of 2016, compared to the same period in 2015.
Revenues amounted to €1.89 billion (-3.3%), while net profit was €8.2 million, down by around three-quarters on the same period last year.
Impacting the negative result were the closure of some stores for renovation this year, resulting in lower revenues in both Slovenia (-3%) and Serbia (-5%). Also, Mercator sold non-core assets in Slovenia, such as the coffee production department Santana, the Grosulje bakery and the M Holidays travel agency.
The revenue decline was the highest in Croatia (-8.3%), due to the closure of the entire market program in June 2015 as a result of market consolidation within the Agrokor Group, while revenues in Montenegro increased by 9.8%.
On the plus side, Mercator’s market share has been steadily increasing since April this year.
During the period January-September 2016, Mercator earmarked €53.2 million for investments (+12.2%), mainly on the reconstruction and furnishing of stores in Slovenia and Serbia, on which it spent 58% of the cash.
The retailer should start construction of its new €100 million logistics and distribution centre in the second half of 2017, expecting work to be completed by the end of 2018.
Mercator is owned by Croatian food-to-retail consortium Agrokor.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. To subscribe to ESM: The European Supermarket Magazine, click here.
