Discount Retail Operating Chain Eurotorg and Belarus' biggest retailer has reported a 10.5% year-on-year growth in net retail sales to BYN 2.4 billion (US$961 million) in the first half of its financial year.
The company attributed this growth to new store openings, as well as a 3.6% growth in like-for-like sale. Like-for-like sales structure continued to reflect changes in customer behaviour in this period, with like-for-like traffic decreasing by 6.5% and like-for-like average ticket increasing by 10.7%, Eurotorg noted. Elsewhere, sales density increased by 3.5% year-on-year in BYN terms to BYN 1,140 (US$ 458) per square meter per month in the first half.
'Strong Operating Performance' Eurotorg CEO, Andrei Zubkou, said, "Eurotorg's financial results for the first half were a logical continuation of the company's strong operating performance, which was characterised by the continued growth of like-for-like sales and new store openings." The gross margin decreased marginally by 0.4 percentage points to 24.3% due to the rapid expansion of the company's discounter formats, which include soft discounters operating under the Hit! banner and hard discounters under the Groshyk banner. The number of stores operating under the Hit! banner increased to 309 from 116 localities, while Groshyk outlets grew to 46 stores from 19 localities. The contribution of discounters to the company's revenue increased to 24.6%, compared to 17.5% in the first half of 2020, Eurotorg added. The retailer reported an EBITDA growth of 12.5% year-on-year, amounting to BYN 228.1 million (US$92 million). EBITDA margin grew by 0.2 percentage points to 8.4% as lower operating expenses offset the decrease in the gross margin.
As of 30 June 2021, the company's store network comprised 987 grocery stores. In the first half, Eurotorg fast-tracked new openings, adding 69 stores, including 58 convenience stores. Nine stores also closed in the first half, taking the net new store openings to 60. Outlook Commenting on the company's outlook for the remainder of the year, Zubkou, said, "In the second half of the year, we will continue to focus on consolidating the progress we have achieved to date, and to develop our business by executing further on our asset-light growth strategy." "We maintain comfortable leverage in terms of timing and volume and continue to explore opportunities for further optimisation of our debt portfolio.
In March 2021, we successfully placed our third bond issue of RUB 3.5 billion (US$48 million) on Moscow Exchange, helping us to reduce currency risk and increase the maturity of our debt portfolio," he added. The company reported a 13.2% increase in net retail sales in the second quarter of its financial year, and is on track to open its 1,000th store later this year.