Poland-based wholesaler and franchise operator Eurocash has posted an operating loss of just under PLN 7 million (€1.66 million) for the first quarter of the year, despite recording an increase in sales.
Sales at the group, which is headquartered in Portugal, rose to PLN 5.19 billion (€1.23 billion) for the period, up from PLN 4.76 billion (€1.13 billion) a year earlier.
The group said that the main drive of the 'sales growth was consolidation of acquired companies which was responsible for the growth at 6.2% level.'
Independent Wholesale
In terms of its independent wholesale business, external sales of goods amounted to PLM 2.82 billion, an increase of 4.43% on the same period the previous year. The group operated 188 Eurocash cash & carry outlets as of the end of Q1, and 8,589 'abc' stores, its chain of convenience stores.
Like-for-like sales in its Delikatesy Centrum franchise stores increased by 2.20% compared to the same period last year. The number of partnership or franchise stores belonging to Eurocash was 4,768 as of the end of the first quarter, including the Groszek, Euro Sklep, Lewiatan and PSD banners.
Looking Ahead
Looking ahead to the coming year, the group said in a statement that it 'expects further growth of modern distribution channels', the 'unfavourable impact' of which will be 'compensated by growth of the FMCG market in absolute terms and consolidation in the traditional wholesale market'.
In addition it anticipates 'potential pressure on labour costs', as well as possible inflation in the coming year.
Commenting on its performance, Barclays European Food Retail Equity Research said that the 'higher than expected losses' were mainly due to 'the development of new projects such as the distribution of fresh products to franchisees network Delikatesy Centrum, the testing of new formats as well as higher net financial charges associated with the additional debt taken to make acquisitions'.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
