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Jeronimo Martins SGPS SABiedronka retailer assesses that consumers are not willing to increase spending on food
Poland's largest retail chain Biedronka, owned by Portuguese Jeronimo Martins group, assesses that consumers are still reluctant to increase their spending on food and that the market remains very competitive, the CFO of Jeronimo Martins Ana Luisa Virginia told a teleconference.
"For now, we do not see consumers willing to spend much more on food. The price continues to be very relevant," Ana Luisa Virginia said.
"Consumers have money, we know that the income of families has increased, savings in Poland have been increasing but we don’t see people spending much in certain categories, including food," she added.
Asked about the competition in the Polish market, the CFO replied: "The market continues to be highly aggressive and highly competitive. I think we can’t expect changes due to circumstances (weaker demand, pressure on costs, particularly on wages) affecting all players. That’s why we continue to invest in prices".
As Virginia pointed out, this has been affecting the margins achieved at the chain.
She reported that shopping basket deflation at Biedronka had slowed in the third quarter to around 4 percent, compared to nearly 6 percent in the first half of the year.
She did not rule out the continuation of basket deflation at the chain in some categories in 2025, especially in the first half of the year.
The Biedronka chain's revenue increased by 3.9 percent year on year to EUR 17.46 billion in the three-quarter period in local currency terms and grew by 2.6 percent to EUR 5.921 billion in the third quarter. LFL sales fell 0.7 percent after nine months and were down 1.9 percent in the third quarter.
Biedronka's EBITDA was EUR 1.343 billion after three quarters, down from EUR 1.353 billion in the prior year period. The EBITDA margin fell to 7.7 percent from 8.6 percent a year earlier.
In 2024, 130-150 net Biedronka shops are planned to open, and the refurbishment programme will include around 275 shops.
Asked about further growth opportunities in Poland, the CFO of Jeronimo Martins said: "Both we and other players still see growth opportunities, especially in smaller cities".
Jeronimo Martins Group's CAPEX amounted to EUR 648 million after the three quarters of 2024, down from EUR 790 million in the prior year period, of which spending at Biedronka reached EUR 253 million.
The group expects that capital expenditure for the whole of 2024 should exceeded EUR 1 billion, slightly less than previously expected.
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