Poland: Biedronka accelerates in Poland
- DRC Discount Retail Consulting GmbH
- 3 hours ago
- 3 min read
Discount Retail Chain Biedronka Poland gains 20 bps in share and improves margins despite rising wages and weak demand.
After Carrefour's departure from Poland, Jerónimo Martins is fulfilling what we explained a month ago, to become strong in Poland. Specifically, the Portuguese distribution chain recorded an impressive 2.5% growth in EBITDA in the third quarter, driven mainly by the like-for-like sales margin in Poland.
In this sense, the brand under which Jerónimo operates in Poland is Biedronka, which has managed to balance its growth along with its margins, gaining market share and improving its profitability despite cost pressures. Cash flow turned positive thanks to stronger operations, while Ara and Pingo Doce maintained a good pace of growth.
Comments on Poland range from stating that "competition in the food retail sector is intense and overall food consumption is relatively moderate" to that "competitive intensity shows no signs of abating in a food retail market offering moderate growth," Jefferies analysts note.
Poland's business lead Jeronimo's growth
In this regard, for several quarters, the growing competition in Poland has been a constant concern, with players such as Carrefour (which has now exited the market). A situation that has led Biedronka, the market leader, to intensify its strategies in terms of both pricing and promotions.
"Rising labour costs, driven by sharp increases in the minimum wage, have further affected margins. Specifically, the share price has risen by approximately 6%, and the main positive aspect of the third quarter is the ability of the management, Jerónimo Martins, to balance revenue growth with profitability," they add from AlphaValue.
The company also achieved a 30 basis point improvement in the EBITDA margin, reflecting the initial benefits of cost reduction initiatives and the moderation of basic basket inflation. Nonetheless, efficiency and cost-saving measures are likely to remain a priority, recovering historical EBITDA margins of 8.5% to 9.0% is a challenge over the next 12 to 24 months.
The impact of minimum wage increases is expected to moderate next year, as growth is now based on a higher base. Experts predict that consumer demand will remain weak in the short term, with customers refraining from purchasing higher-quality products despite the improvement in their real incomes.
The management of Jerónimo Martins pointed out that the deflationary environment of the previous year, 2024, had negatively affected this indicator; while the current context of low inflation is proving beneficial. Working capital is expected to remain stable, depending on growth in the fourth quarter.
Biedronka needs to move forward
Biedronka faces a double challenge: low consumer demand and sharply rising labour costs, following Poland's minimum wage rise by 9.2%. While real wages have improved significantly, this has not yet translated into a higher volume of demand for food.
Consumers are reluctant to buy higher-quality products, even as non-essential product categories show signs of recovery. Increasing price competition has prompted Biedronka to intensify its promotional activities and price investments to defend its leading position (with a market share of approximately 26%).
As for Polish supermarket shares, they have fallen since July 2025, despite the three major players reporting strong second-quarter results, mid-to-high single-digit comparable sales growth, and modest EBITDA margin expansion.
However, despite the stagnation in sales volume and constant competition, Biedronka should continue to gain market share, supported by its proven pricing discipline. Jerónimo Martins' strategy, for its Polish supermarket, is to open between 130 and 150 new stores per year, which remains a key strategy to drive growth in a fragmented market.
Low shopping basket inflation and improving macroeconomic indicators, including higher consumer confidence and real income growth, should support mid-single-digit sales growth in the coming quarters. A strong performance in the third quarter, with comparable growth of around 4%, an EBITDA margin expansion of 20 basis points and an increase of approximately 15% in net profit (8% above consensus), reinforces AlphaValue's view that management is effectively driving growth while maintaining profitability.
