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Poland: Biedronka's plans for 2021

Discount Retail Chain Biedronka (owend by Portuguese Jeronimo Martins) plans for 2021 approximately EUR 700 million (US$ 842million) in investments, 100 new stores.

The plan for this year provides for the opening of approx. 100 new Biedronka net stores (approx. 50% in a smaller format) and the modernization of 250-300 stores.

Jeronimo Martins, owner of incl. Biedronka stores, assumes that this year's capital expenditure will amount to approx. EUR 700 million, of which 60%. will concern the Biedronka chain, the company informed. The plan provides for the opening of approx. 100 new net Biedronka stores (approx. 50% in a smaller format) and the modernization of 250-300 outlets. We enter 2021 with the reinforced belief that the networks belonging to the Jeronimo Martins Group are able to respond quickly and effectively to the challenges of a pandemic - said Pedro Soares Dos Santos, CEO of the Jeronimo Martins Group

In 2020, the group's CAPEX amounted to EUR 470 million (US$ 566million), of which 64% (EUR 302 million/US$363 million) is related to the investment in Biedronka. A year earlier, the group's expenditure amounted to EUR 678 million (US$816 million). The company allocated EUR 41 million (US$50million) to COVID protection, including antibacterial masks and gels for store employees. Consolidated revenues amounted to EUR 19.3 billion (US$23billion, +3.5% compared to 2019). Consolidated EBITDA amounted to EUR 1.4 billion (US$1.7billion, decrease by 1% y-o-y). Profit amounted to EUR 312 million (US$375 million, decrease by 19.9%). The Management Board will recommend a payment of PLN 181 million (US$ 48million) in the form of dividends to shareholders. In Poland, the chain had revenues of EUR 13.5 billion (10.4% more yoy in the local currency and 6.7% in EUR). This means an increase of 7.1%. in terms of LfL. EBITDA amounted to EUR 1.25 billion (US$1.5 billion, an increase of 9.3% in PLN). 129 stores were added and there were 3,115 stores at the end of 2020. 267 stores underwent modernization. There are also as many as 3,750 self-service checkouts in over 1,100 stores. The network spent EUR 302 million on investments. Biedronka increased its market share by 1.6% points to 25.7%. The company introduced 196 new private label products. Currently, private labels are responsible for 40%. networks. The chain started cooperation with Glovo and in 28 cities it delivered purchases from its stores. The network also increased the number of outlets by 400 that donate food with a near-use-by date to public benefit organizations. 94% employees of stores and distribution centers received pay raises. On average, the salary increases were 10%.

The company said that the macroeconomic outlook for 2021 depends largely on the development of the pandemic and the rate of vaccination. As noted, there is still uncertainty about the possible introduction of restrictions, at least in the first half of the year. It is also unknown how these restrictions will affect consumer behavior. As Jeronimo reported, the group companies' goals are, inter alia, increase sales and protect profitability through cost discipline and improvement of operating processes. Jeronimo Martins expects that, as in 2020, domestic private consumption in Poland will be the strongest of all the markets where the group is present. Food inflation should remain low despite the impact of the trade tax and the sugar levy. In 2020, food inflation was 4.7%, GDP fell by 2.8%, and private consumption fell by 3%. At the same time, the minimum wage increased by 15.6%. The number of trading days decreased by 6 days.

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