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February 5, 2014

ITALY: Sales up but profits down at Esselunga

Italian food retailer Esselunga has said it saw operating profit fall in 2013 as it moved to keep a lid on prices in the face of the country's weak grocery market.

By Dean Best

Italian food retailer Esselunga has said it saw operating profit fall in 2013 as it moved to keep a lid on prices in the face of the country’s weak grocery market.

Esselunga, which runs over 140 stores in Italy, said it estimated its operating profit at “over” EUR300m (US$406m), less than it generated in 2012. It did not publish a figure for net profit.

The company said the fall in profits was “partly” due to its “pricing policy”. Esselunga said suppliers had pushed up prices by 1.8% but it held its own prices at the same level as 2012.

“Over the past two years in the face of price increases received for approximately 4% Esselunga has not transferred any price increase to their customers,” the retailer said.

Sales were EUR6.9bn, up 1.7% on 2012. Esselunga said the result compared to a market that saw “a significant contraction in the consumption of food”.

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