Jeronimo Martins: The observed demand for cheaper products at Biedronka has an impact on the margin
In the current situation of rising prices, Biedronka is prepared for the cost pressure of food, said Jeronimo Martins - owner of the Biedronka chain. Ana Luisa Virginia - CFO, noted that consumers limit their purchases, buy cheaper products, which has an impact on margins.
"As for food inflation, we don't think we're going to see its end," said Ana Luisa Virginia in a conference call.
"The fact that people are 'trading down' (i.e. buying cheaper products) has an impact on sales, especially margins. Wide issue: sell more products with a lower margin, i.e. goods, products that have more or less added value - of course, this has an impact on the margin in percentage. In Poland, it will depend on the behavior of consumers, and we see new, additional sources of pressure, and these come in particular from the increase in costs, which directly affects not only our company, but also families. we see energy prices going up and we go into winter if it goes further up and mortgages are revised with many people still having floating rates - this will likely mean that there is a tendency for people to start be aware that they need to save on food," the CFO explained.
She stressed that currently "Biedronka is in the best position to attract new customers - and it is happening".
"You have various forecasts of inflation, but we see it this way - or at least we are prepared for it - that this pressure will continue," announced the CFO
Sales in the Biedronka chain increased overall, calculated in PLN, by 26.9% y / y in the second quarter of this year, and in EUR it increased by 23.7% y / y to EUR 4,446 million, the owner of the chain Jeronimo Martins said. Sales in comparable stores (like-for-like, LFL, calculated in PLN) increased in this period by 22.5% y / y.
In the first half of br. The Biedronka chain opened 40 stores (33 net) and rebuilt 127 locations, increasing the network to 3,283 outlets at the end of June.
Source: Biedronka and ISBnews