Eurocash Group has reported a decline in revenue and profit in the first half as Poland's economy recovers at a slower pace than economists and analysts expected.
In the first half, Eurocash Group generated revenue of PLN 15.8 billion (€3.7 billion), or 1% lower than the first half of 2023.
EBITDA margin for the period declined 0.4 percentage points year on year, the company added.
Eurocash attributed the decline in profitability in the first half of the year to one-off restructuring costs and operating costs related to its second Frisco warehouse, which commenced operations at the end of last year.
Paweł Surówka, CEO of Eurocash Group, stated, "Restructuring and optimisation activities that we have been conducting since the autumn of last year have partially protected our profitability, but the entire market is under strong pressure from a very high increase in the minimum wage, low consumer optimism, and a price war.
"We are focusing primarily on keeping costs in check. In line with previous assumptions, we are working to balance the increase in the minimum wage by increasing efficiency."
In the second quarter, group revenue declined 2.5% year on year to PLN 8.2 billion (€1.9 billion).
Store Modernisation
Eurocash aims to continue key projects to integrate its wholesale businesses and modernise the Delikatesy Centrum store model, which has been rolled out in 30 locations as of the end of the first half.
The group is introducing the model to other stores to offer a better shopping experience for customers, with prices and assortment that cater to their needs and improve efficiency of space.
Surówka added, "In line with assumptions, the refreshed stores are achieving better results. The increase in the number of transactions in these stores is approximately 7% higher than before the implementation of the new model.
"We believe that thanks to changes in the assortment and increasingly precise analysis of consumer needs, Delikatesy Centrum will become the number one brand in the proximity supermarket segment and the most consumer-oriented chain on the market."
