Slovenian retailer Mercator today (18 May) posted an increase in quarterly profits despite highlighting an increasingly challenging economic environment in the country.
Net profit rose 53% over the first quarter to reach EUR10.1m (US$14.4m), as sales rose 6% to EUR675.5m.
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The company said that changes from the “economic hardship” facing its consumers are “still manifest in the composition and volume of consumption”. It highlighted a particularly bleak environment saying that the unemployment rate is mounting as well as insolvency proceedings being instituted at “several” major companies.
The retailer said that throughout the period of “severe economic conditions and mounting upstream prices” it has committed considerable funding to keep prices down and to maintain consumer purchasing power. Mercator said it has committed to not increasing prices in order to maintain its profit margins.
“At the expense of our profit margins and for the benefit of our customers, we have frozen the prices of over 300 fast-moving consumer products and basic products of our Mercator private label; cut the prices of over 2,000 products of various brands; by the end of 2011, we shall develop 200 new products with the most favourable quality to price ratio,” the company said.
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