Polish retailer and wholesaler Eurocash Group has reported sales growth of 3% year-on-year to PLN 26.3 billion (€5.7 billion) in its financial year 2021.
EBITDA, excluding write-offs in the retail segment, remained level with the year before at PLN 782 million (€168.4 million), the retail group noted.
'Extremely Demanding'
Paweł Surówka, president of the Eurocash Group, commented, "The year 2021 turned out to be extremely demanding for independent retailers, who are the main customers of the Eurocash Group.
"Consumers, thrown out of their daily routine by lockdowns and remote work, and worried about the physical and financial consequences of the pandemic, adjusted their purchasing behaviour accordingly, preferring less frequent and larger purchases."
This, in turn, led to more consumers shopping at discounters, which affected Eurocash-supplied outlets, Surówka added.
"We felt it clearly in our own stores, where the impact of the pandemic overlapped with the ongoing and longer than expected integration of Mila stores with the Delikatesy Centrum chain," he said.
"This required tough decisions, such as the closure of the 50 most-hit stores, to concentrate efforts on developing the rest of the chain. Therefore, we are relieved to see that these decisions are bearing the first fruit."
Divisional Performance
The company's wholesale division saw stable growth despite a challenging market environment in the first half.
The division saw sales grow by 2% during the financial year to PLN 19.25 billion (€4.2 billion). EBITDA increased by 6% year-on-year, exceeding PLN 668 million (€143.9 million).
The decrease in sales in cash-and-carry wholesalers was compensated by the Eurocash Dystrybucja (sale with delivery to the customer) and Eurocash Serwis (sale of cigarettes and impulse products) formats.
The retail segment reported sales of PLN 6.38 billion (€1.4 billion), up 5% year on year.
Normalised EBITDA in the division amounted to PLN 284 million (€61.2 million), down from PLN 318 million (€68.5 million) in 2020.
Surówka added, "Most importantly, we observe that the partial consumer shift from independent stores to discounters, seen during the pandemic, was only temporary and turned in favour of the independent market with a return to pre-COVID normality.
"As lockdowns decreased, vaccination rates rose and people slowly learned to live with the virus, we saw a return to local shopping, which resulted in an overall better second half and a much better fourth quarter 2021."
