Eurocash Group reported a decline in revenue and profit in the first half of the year as the Polish economy recovered more slowly than economists and analysts expected.
In the first half of the year, Eurocash Group generated revenues of PLN 15.8 billion (EUR 3.7 billion), 1% less than in the first half of 2023.
The EBITDA margin for this period decreased by 0.4 percentage points compared to the previous 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 Frisco’s second warehouse, which began operations at the end of last year.
Paweł Surówka, CEO of Eurocash Group, said: “The restructuring and optimization measures we have been implementing since autumn last year partially protect our profitability, but the entire market is under strong pressure due to a very sharp increase in the minimum wage, low consumer optimism and a price war.
“Our main focus is on cost control. As previously stated, we are working to offset the increase in the minimum wage through efficiency improvements.”
In the second quarter, group sales fell by 2.5 percent compared to the same period last year to PLN 8.2 billion (EUR 1.9 billion).
Branch modernization
Eurocash intends to continue important projects to integrate the wholesale business and modernize the Delikatesy Centrum store model, which was introduced in 30 locations at the end of the first half of the year.
The group is rolling out the solution in other stores to offer customers a better shopping experience, with prices and assortment tailored to their needs and improving space efficiency.
Surówka added: “As expected, the modernized stores are achieving better results. The increase in the number of transactions in these stores is about 7% higher than in the stores before the introduction of the new model.”
“We believe that thanks to the changes in the range and an increasingly precise analysis of consumer needs, Delikatesy Centrum will become the number one brand in the local supermarket segment and the most consumer-oriented chain on the market. (…)”
