Slovenia-based retailer Mercator, which runs over 1,700 stores across south-eastern Europe, has blamed worsening economic conditions in the second half of 2011 for a fall in annual earnings.
Mercator booked net profit of EUR23.5m (US$31.3m) for 2011, down 22.5% on the year. The retailer said a “notable aggravation of the economic circumstances” during the back half of the year hit sales and led to a greater need for promotions. Unemployment, Mercator said, had reached “new historical highs” in some of its key markets in the region.
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Pre-tax profits were down 20.8% at EUR31.9m, the retailer reported
The company saw its revenue improve, rising 5.3% to EUR2.93bn. Sales in Slovenia, which accounts for over half of Mercator’s revenue, fell 0.2%.
Mercator’s sales increased in each of its markets outside Slovenia. In total, sales outside Slovenia increased 13.9%, with the retailer pointing to acquisitions in Montenegro and Serbia.
In 2011, Slovenia accounted for 57.7% of Mercator’s sales, down from 60.9% a year earlier.
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