The Polish retailer and wholesaler Eurocash Group has reported sales growth of 3% on an annual basis to PLN 26.3 billion (EUR 5.7 billion) during the financial year 2021.

EBITDA, excluding depreciation in the retail segment, was at the same level as the year before at PLN 782 million (EUR 168.4 million), the retail group noted.

“Extremely demanding”

Paweł Surówka, CEO of Eurocash Group, commented, “The year 2021 proved to be extremely demanding for independent resellers, who are Eurocash Group’s main customers.

“Consumers, who were thrown out of their daily routine of locks and teleworking, and worried about the physical and economic consequences of the pandemic, adapted their buying behavior accordingly and preferred less frequent and larger purchases.”

This in turn led to more consumers shopping at discount stores, which affected stores supplied by Eurocash, Surówka added.

“We felt it clearly in our own stores, where the effects 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 closing the 50 most affected stores, to concentrate efforts on developing the rest of the chain. Therefore, we are relieved to see that these decisions bear the first fruit.”

Divisional performance

The company’s wholesale division saw stable growth despite a challenging market environment during the first half of the year.

The division saw sales increase by 2% during the financial year to PLN 19.25 billion (EUR 4.2 billion). EBITDA increased by 6% on an annualized basis and exceeded PLN 668 million (EUR 143.9 million).

The decrease in sales at cash-and-transport wholesalers was offset by the formats Eurocash Dystrybucja (sales with delivery to customer) and Eurocash Serwis (sales of cigarettes and impulse products).

The retail segment reported sales of PLN 6.38 billion (EUR 1.4 billion), an increase of 5% compared to the previous year.

Normalized EBITDA in the division amounted to PLN 284 million (EUR 61.2 million), a decrease from PLN 318 million (EUR 68.5 million) in 2020.

Surówka added, “The most important thing is that we observe that the partial consumer transition from independent stores to discount stores, seen during the pandemic, was only temporary and turned in favor of the independent market with a return to normalcy before COVID.

“As locks decreased, vaccination rates rose and people slowly learned to live with the virus, we saw a return to local shopping, resulting in an overall better second half and a much better fourth quarter in 2021.”