Poland: Carrefour prepares its farewell and Biedronka is positioned to occupy its space

Discount Retail Chain Biedronka's mother company the Portuguese distribution chain Jerónimo Martins delivered a strong first half of fiscal 2025, with comparable sales and EBITDA in the second quarter, albeit above expectations, driven by the strong performance of most of the distribution group's brands.

Poland would be another of the failed markets of the French supermarket, where since 2024 the management has considered two paths, divestment or restructuring the business model.

In this sense, with the possible withdrawal of Carrefour in Poland, Jerónimo Martins could accelerate its growth and expansion in the country. The retail distribution group Jerónimo Martins, in Poland, is present under its Biedronka brand, which has achieved comparable sales of 5.3% more year-on-year, albeit in line with the consensus.

"Despite strong second-quarter results, the stock is down roughly 4.5%, likely reflecting investors' concerns about the second half. Management's caution in the face of intensifying competitive dynamics and continued weakness in Polish demand was not well received," Alpha Value analysts note.

THE BIEDRONKA FORTRESS INSIDE JERÓNIMO MARTINS

Against this backdrop, Biedronka gained 20 basis points of market share in the first half of fiscal 2025, despite unfavourable weather conditions in June. As expected, shopping basket inflation was lower than domestic food inflation, reflecting the company's continued focus on price competitiveness.

However, in the first half of 2025, the EBITDA margin of the Jerónimo Martins group expanded by 20 basis points year-on-year, to 6.4%. If we analyse it by segment, in Poland, under its Biedronka brand, the retail group achieved an EBITDA margin of 10 basis points to 7.7%.

Biedronka plans to open between 130 and 150 new stores by the end of 2025

"The annualisation of the VAT policy in April 2024 could have contributed to the reduction in food inflation figures. According to the CFO, volumes remained stable in the first half (slightly below expectations) due to weak consumer demand, despite the 9.2% increase in the minimum wage," Alpha Value experts add.

Nonetheless, competitive intensity remains high, and management said promotional activity has not decreased. Even so, Biedronka plans to open between 130 and 150 new stores, and remodel around 200 stores by the end of this fiscal year. An expansion that may have to do with the future disappearance of Carrefour, and with the ambition of Jerónimo Martins to occupy the space left free by the French supermarket.

In Poland, Jerónimo Martins got profitability improvements driven by efficiency gains, cost-cutting initiatives, and easier gross margin comparables since the beginning of 2024 (when a major campaign was launched).

Likewise, both Colombian discount chain Ara and Pingo Doce exceeded the expectations of market analysts, while Hebe underperformed both in sales and in the margin itself. On the other hand, as for Biedronka, it maintained its market share, but faced a weakness in sales volume due to competitive pressure.

CARREFOUR'S PROBLEMS IN POLAND

In this sense, the problems in Poland are not new. In other words, on December 16, 2024, MERCA2 already announced that Carrefour was exploring a total sale or the sale of a significant stake to an interesting suitor (it may be from the sector or venture capital), an operation that is directly related to the enormous low performance that the French distribution group is having compared to its competitors.

Following this line, Poland would be another of the failed markets of the French supermarket, where since 2024 the management has considered two paths, to divest or to restructure the business model and not have to abandon another market, so as not to have burdens that take away the good numbers of the group in other countries such as Spain or France.

"Investors are waiting for the outcome of the ongoing strategic and commercial review. We would not be surprised if management announced the exit of one or two countries and a greater focus on Latin America," add Alpha Value's experts. These statements support the possibility that Carrefour will also leave its business in Poland, being one of the countries with the lowest percentage of sales within the Group.

Read more: Carrefour prepares its farewell in Poland and Jerónimo Martins is positioned to occupy space

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