Poland's Eurocash Group has reported 'stable' sales amounting to PLN 7.6 billion (€1.8 billion) in the first quarter of its financial year.
EBITDA for the quarter reached PLN 139 million (€32.5 million), while net loss amounted to PLN 87 million (€20.4 million), the company noted.
Eurocash added that a one-off restructuring cost of PLN 11 million (€2.6 million) impacted its first-quarter result.
Paweł Surówka, president of Eurocash, commented, "The first quarter of the year is usually the weakest for retail trade. The increase in the minimum wage had a negative impact on the results, which affects not only the group, but also the condition of our clients.
"This quarter's results are also burdened by the costs of implementing the savings programme, which, however, is already bringing tangible results. Throughout the year, we plan to further improve efficiency, which will be reflected in our market shares."
The efficiency improvement programme involves the integration of wholesale companies and simplification of the organisational structure to offset the effect of the increase in the minimum wage throughout the year.
Surówka added, "Total savings resulting from the implementation of the plan to increase cost efficiency throughout the year should amount to PLN 211 million (€49.4 million), which will fully offset the increase in costs resulting from the increase in the minimum wage.
"Employment restructuring, mostly carried out at the turn of 2023 and 2024, includes both employment reduction and productivity growth. In total, the employment restructuring programme will bring savings of PLN 108 million (€25.3 million) this year."
Quarterly Highlights
The Delikatesy Centrum chain reported a more than 5% increase in like-for-like sales in the first quarter.
Eurocash Group rolled out a new Delikatesy Centrum store model at the beginning of the year to improve the shopping experience for consumers, better adapt the store's prices and assortment to customer needs, and ensure efficient use of space.
The company hopes to convert 30 stores to the new model by the end of June.
The first quarter also saw the merger of Eurocash Dystrybucja and Eurocash Cash & Carry under the umbrella brand Moje Sklepy.
Moje Sklepy operates the ABC, Groszek and Euro Sklep chains, within the Eurocash Sieci Partnerskie unit.
In the first quarter, almost 65% of the wholesale segment's sales were executed by ECSP, the company noted.
Surówka added, "We are observing a constant increase in the number of customers actively using the EuroPlatform, and more than 80% of stores accept promotions in the Moje Sklepy application, which we are gradually developing, giving owners of independent stores access to attractive offers."
