Portugal's Sonae MC 'Adjusting To New Normal', Says CEO
Portuguese retailer Sonae MC is "gradually adjusting to a 'new normal'", following the impact of COVID-19 on its business, the group's chief executive Luís Moutinho has said.
In a report to announce the Continente-owner's half-year results, Moutinho said that the first half was "an extraordinary period for the whole of Sonae MC’s businesses, with massive challenges that impacted both our near-term priorities and long-term direction".
It was a period that saw "steady growth" in food sales, underpinned initially by a phase of 'stocking up', followed by increased demand in the at-home market, "which remained more significant than usual until the end of June," Moutinho added.
"Still, the COVID-19 outbreak has materially impacted our business," he said, "Our response to the crisis has required substantial changes to our operating model, which have led to a significant increase in costs, weighing down on profitability in the first six months of the year."
As previously reported, Sonae MC saw like-for-like sales grow by 8.3% in the first half, while turnover was up 11.5% to €2.43 billion, amidst an environment of accelerating food inflation (+2% in the first half).
The company said that both its larger- and smaller-format stores saw growth, with its hypermarkets seeing a 'resilient performance' both for their broad offering and for the 'perceived sense of safety' while shopping at larger stores.
E-commerce also provided a boost to the group, with high shopping levels remaining after lockdown measures had eased, 'benefiting from a channel shift that appears to have stuck', said Sonae.
Looking ahead, Moutinho said that Sonae MC's "capital structure remains well-funded, with lower net financial debt and a strong maturity profile providing significant liquidity headroom and giving us enhanced flexibility".
On the emergence of a 'new normal' for shoppers, he said that the company is "investing in understanding the structural changes and consequences arising from this unprecedented event, by refocusing on our longer-term strategy to stay at the forefront of the market and continue leading transformation in our industry, as the most forward-looking and innovative player in the sector.”
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