Mercator H1 2018 sales slow down

Date : 13 September 2018

Mercator reported an increase in retail sales of 6.6% to €787m for the first half of 2018. A good performance in Bosnia-Herzegovina (BiH) and a return to growth in Serbia positively contributed to its financial performance. However, the retailer reported a slowing in the pace of growth in Slovenia.

Slovenia: sales growth halved…

Mercator Slovenia’s growth halved to 0.8% in H1 2018, when compared to the 2017 full year growth of 1.7%. This is because the retailer refurbished over 100 stores in the first half of 2017 compared to 48 in 2018. Refurbished stores offer more space to fresh food, food-to-go and hot food counter. The retailer expanded space in several categories to stock a more SKUs.

…and Serbia returned to growth

Mercator Serbia reported a 1.1% year-on-year sales growth compared to same period last year. This represents a recovery in performance versus the decline it reported in its 2017 full year results. The decrease in sales last year was caused by store closures, which were requested by the market regulator.

Mercator prepares for Lidl entry into Serbia in 2018…

Lidl announced it will open its first 10 to15 stores in October 2018. Mercator will optimise shelf space to allow for a wider SKU range, focus on the development of private label products and improve its price perception through increased promotional activity.

…and for expansion in 2020

Mercator said it has completed the first phase of its business strategy. This follows the exit of parent company, Agrokor, from administrative control. Mercator said it can now focus on the next phase of its business strategy for 2018 and 2019, which is focused on improving its profitability. In addition to that Mercator plans to dispose non-retail assets to improve cash flow and reduce debt. It is also preparing to raise funds to pay for further targeted store expansion and acquisitions from 2020 to 2022.

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