GDANSK (Reuters) -Polish retailer and wholesaler Eurocash reported a 2% drop in its third-quarter core profit to 232.1 million zlotys ($63.1 million) on Monday, as falling like-for-like sales and heavy competition continued to weigh on its performance.
WHY IT’S IMPORTANT
The result marks another difficult quarter for the group, which has struggled to keep pace with fast-growing discount and convenience store operators in Poland.
Eurocash is one of Poland’s largest food wholesalers and retail franchise operators, but it has been losing ground to discount rivals like Dino Polska and convenience store operator Zabka.
CONTEXT
The weak results contrast with solid performances from Dino Polska and Jeronimo Martins, which have benefited from slowing inflation and rising wages in Poland.
Jeronimo Martins, which operates the country’s largest food retailer Biedronka, said in a quarterly report that an increase in Poland’s minimum wage boosted households’ disposable income, benefiting its stores.
In contrast, Eurocash said declining consumer purchasing power and cost pressures from the minimum wage hike remained key challenges for the group.
BY THE NUMBERS
Eurocash’s third-quarter revenue fell 4% year-on-year to 7.94 billion zlotys. Like-for-like sales declined across its main segments, falling 13.1% in the Cash&Carry wholesale business and 3.65% in Delikatesy Centrum retail stores.
($1 = 3.6762 zlotys)
(Reporting by Alicja Surdy, editing by Milla Nissi-Prussak)
