Sonae Looks At Emerging Markets for Supermarket Chain Expansion
Sonae SGPS SA, the owner of Portugal’s biggest supermarket chain according to sales, is considering additional expansion in emerging markets after announcing plans to enter the United Arab Emirates through a franchise agreement.
The Portuguese retailer will seek to expand through partnerships, which "significantly reduces the risks involved in expanding our food business abroad," Luis Reis, chief corporate center officer, said in a telephone interview Wednesday.
Sonae’s Continente supermarket chain is due to start operating in the U.A.E. through a partnership with Fathima Group. Last year, it scrapped plans to expand to Angola, a former Portuguese colony, after a joint venture with Angolan company Condis ended.
In Portugal, Sonae will rely on discounts and promotions to increase sales and maintain retain customers. Sales last year rose 0.7 per cent from the previous year to €4.85 billion ($5.3 billion), the company said in a regulatory filing Wednesday.
Sonae’s financing needs are covered until 2017, Reis said, adding that the company remains focused on reducing the cost and increasing the maturity of its debt.
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