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Retail

Strong Second Quarter At Jerónimo Martins

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Strong Second Quarter At Jerónimo Martins

Portuguese retailer Jerónimo Martins has recorded a 9.9% increase in second-quarter sales to €2.87 billion, with net profit rising 7.6% on last year's figures to hit €90 million.

Sales at Jerónimo Martins' main Portuguese banner, Pingo Doce, rose by 2.3%, despite the harsh environment for consumer expenditure.

Pingo Doce strengthened its commitment to domestic production during the first half of the year, with some 80% of all produce sold by Pingo Doce now of Portuguese origin, rising to over 90% in the fresh fruit and vegetable category.

Jerónimo Martins 'decided to extend - for a further 12-month period - the initiative of bringing forward by an average of 10 days the terms of payment for around 50% of its small and medium-sized domestic suppliers of perishables', according to the company.

Like-for-like sales at the retailer's Polish discount banner Biedronka increased by 2%, with consumer spending negatively impacted by worsening economic conditions and poor weather during the months of May and June.

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'In Poland, the half-year was characterised by softening consumption resulting from a deceleration in the economy. The retail sales market, which had grown 3.7% on the first quarter of 2013, recorded a significant slowdown in the second quarter, which closed with growth of 0.9%', Jerónimo Martins said.

'However, despite the less favourable economic environment, Biedronka grew ahead of the market, reinforcing its leadership in Polish food retail in the first six months of the year', the retailer added.

“We are confident that Biedronka’s strong market position, focused on price leadership and convenience together with the robust recovery of Pingo Doce will result in LfL sales growth ahead of the respective markets. Therefore we have reasons to confirm the Group’s positive outlook for 2013 in what regards growth both in sales and in earnings," Pedro Soares dos Santos, chief executive at Jerónimo Martins said.

The Group plans to invest between 600 and 700 million euros during 2013, of which 70% will be allocated to Biedronka. Work on two new distribution centres - one to be located in the Algarve - is 'running on schedule', according to the retailer.

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© 2013 - ESM: European Supermarket Magazine by Ellen Lunney

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