Jeronimo Martins has said that it is “comfortable” with the competitive environment in Poland, where the Portuguese retailer generates about half its sales.
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Sales at Jeronimo Martins’ Polish unit Biedronka increased by more than 33% in local currency terms, outpacing the growth of its domestic business. However, in euro terms sales rose only about 4% due to the steep devaluation of the Polish zloty.
“This year so far we have fulfilled most of our objectives. Things could be a little better if the zloty had not devalued, but this is a fact of life,” chief executive Luis Palha said during a conference call.
Biedronka is the largest discount chain in Poland and the format has benefited from the rise of discount sales in the country.
“We see the market still with very, very good potential for development in the long-term… one of the formats is doing better than the others at the moment, which is the discount,” Palha observed.
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By GlobalDataPalha dismissed reports that the Polish food retail environment is becoming more competitive, with rumours that Wal-Mart is preparing to enter the country and that Tesco is ramping up its expansion efforts in the market.
“We have seen no special change… I don’t see newcomers now in the market,” he suggested.
Moreover, Palha added, Jeronimo Martins has not seen the need for a “big price investment” in the market, meaning that EBITDA margins are “in line” with last year.
The Lisbon-based food retailer said this morning net sales increased to EUR3.38bn, up 6.6% – or 21.6% excluding foreign exchange.
Sales were boosted by the acquisition of 77 Plus discount stores in Portugal and 205 stores in Poland in the last year, the company said.
