Retail

Poland's Eurocash Sees Revenues Up In First Half, Despite COVID Challenges

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Independent store owners and franchisees provided a much-needed boost to wholesale operations at Poland's Eurocash in the first half, which saw revenues rise 2% to PLN 12.1 billion (€2.76 billion).

The group posted a marginal decrease in EBITDA in the period, of PLN 337 million (compared to PLN 338 million a year earlier), despite additional costs relating to the COVID-19 pandemic, which the group estimated at around PLN 17 million. Net losses were down PLN 20 million.

Wholesale Growth

The group's Wholesale segment posted a 0.3% increase in sales to PLN 9 billion, as well as an EBITDA gain of 3%, due to positive sales to independent stores and franchisees, particularly for impulse products and cigarettes.

However, the business' performance was offset by lower demand from petrol stations, and a 'significant drop in sales' at its Eurocash Gastronomia arm, which supplies the HoReCa trade.

"The results of the wholesale segment were positively influenced by sales at Cash & Carry wholesalers, which increased by 4% year on year, as well as sales of cigarettes and impulse products, where the increase exceeded 7%," commented Jacek Owczarek, member of the management board and financial director of Eurocash Group.

Another factor boosting wholesale sales at the group was the eurocash.pl platform, which saw PLN 2.1 billion with of sales in the first half of the year, up PLN 0.5 billion on the same period last year.

"The value of goods ordered via smartphones amounted to as much as PLN 485 million, compared to PLN 270 million in the first half of 2019," Owczarek added. "The difficult period of the pandemic showed the business potential of B2B e-commerce solutions."

Retail Performance

In the group's Retail business, sales were 5% higher in the first half, at PLN 2.96 billion, while EBITDA was up 3%.

Like-for-like sales at its Delikatesy Centrum stores were up 6% in the period, however sales at its Immedio kiosks were down 20%, due to the closure of many shopping malls.

Its Projects segment, which includes retail formats such as Duży Ben, abc na kołach and Kontigo, saw strong sales growth, largely driven by the Duży Ben alcoholic store chain.

The chain, which increased its store count by 16 in the period, saw a 16% increase in like-for-like sales in thee period, while abc na kołach, a mobile grocery store on wheels, was up 27% and the Kontigo online business saw sales up 140%.

At the end of June, the business completed the acquisition of a majority stake in Frisco, the leader in e-commerce in the Polish capital, Warsaw.

"Thanks to the acquisition of Frisco, we can gain knowledge and extensive experience in online sales, which will allow us to further develop this area for our clients, owners of independent retail stores," said Owczarek.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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