Slovenian retailer Mercator has posted a mixed first-half results amid challenging economic conditions in south-eastern Europe.

Operating income reached EUR47.6m in the first six months of 2011, down 10.3% from the same period last year.

Mercator, which operates across seven countries in the Balkans and south-eastern Europe said volumes and consumption had fallen amid higher levels of unemployment in all its markets.

The retailer, which faced rising raw-material costs, said it spent EUR12m on lowering prices on over 2,000 products and keeping the price of over 300 own-label lines constant.

The retailer today (24 August) reported net profit of EUR18.5m (US$26m), up 4.9%, but this was boosted by lower finance costs.

Mercator posted a turnover of EUR1.42bn for the first half of the year, marking an increase of 6.1%. Sales in Slovenia climbed 1.1%, compared to growth of 18.3% abroad. Slovenia accounted for 59% of Mercator’s turnover in the first half of 2011, down from 62.9% in the same period a year ago.

The company opened 26 outlets in the first half of the year, taking its network to a total of 1,535 stores.