Sligro sees growth below market

Sligro sees growth below market

Netherlands-based retailer Sligro Food Group has seen first-quarter sales growth at its food retail business trail the market amid intensifying price competition.

In the first quarter of 2014, Sligro said food retail sales fell 4.4%, while consumer sales at its Emte supermarkets dropped 2.7% in the period.

While Sligro flagged issues such as new VAT rules on tobacco products, the company conceded sales growth at its supermarkets was around 1.5% below market growth.

Sligro said the result was impacted by tough year-on-year comparables as the group lapped "high growth figures" for the first quarter of last year. "The intensified price competition experienced in the fourth quarter of 2013 continued in the first quarter of this year," Sligro added.

The company said total group sales increased 0.6% in the period, climbing to EUR592m (US$820m). Organic sales were flat. Sligro estimated the late Easter reduced sales in the period by around 1.5%.

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Sligro Food Group First-quarter 2014 trading update

Sligro Food Group N.V.'s sales for the first quarter (13 weeks) of 2014 were €592 million, an increase of €3 million or 0.6% compared with sales of €589 million in the same period in 2013. Organic sales growth was flat. The timing of the Easter holiday had an adverse effect on both food retail and foodservice sales growth which we estimate at around 1.5 percentage points.

Food retail Food retail sales were down 4.4% in the first quarter, due to new VAT rules for tobacco products, store portfolio change and other factors. Like-for-like consumer sales at the EMTÉ supermarkets were 2.7% lower in the first quarter. This was around 1.5 percentage points below market growth, but the high growth figures for the first quarter of 2013 were also a factor. The intensified price competition experienced in the fourth quarter of 2013 continued in the first quarter of this year.

Foodservice Foodservice sales were up 3.5%. Organic growth, excluding the effect of acquisitions and changes to the VAT rules for tobacco products, was 1.5% (or 2.0% including the tobacco product changes). Sales growth increased as the first quarter progressed. The format changes we have made appear to have been well received by the market. The integration of Rooswinkel is proceeding according to plan. The first customers were recently transferred to the Sligro Food Group distribution centres and we expect to complete the process by the end of May. Horeca Totaal Sluis B.V. has been included in the group's consolidated figures since the beginning of March.

We prefer not to give a firm projection of the half-year results at this stage. The half-year figures will be published on 17 July.

Sligro Food Group encompasses food retail and foodservice companies selling directly and indirectly to the entire Dutch food and beverages market. The group is active in foodservice as a wholesaler and in food retail as a wholesaler and retailer. Sales in 2013 totalled €2.5 billion, generating a net profit of €68 million. The group employed an average of over 5,800 full-time equivalents in 2013. Sligro Food Group shares are listed on Euronext Amsterdam.

Original source: Sligro Food Group