Press Releases

• In 2020, the Eurocash Group cooperated with more than 91 thousand customers. As many as 70,000 of them were independent entrepreneurs running local retail stores throughout Poland.
• Independent stores cooperating with the Eurocash Group reached 35 million Poles, of which 38% were rural residents.
• As part of its corporate social responsibility, the Group supported Polish entrepreneurs and social groups most affected by the COVID-19 epidemic. 2,300 purchases for seniors, 30,000 lunches for medical personnel, 191 thousand liters of water for hospitals were delivered, and 125 webinars dedicated to running a store during the epidemic were organized. More than 23,000 people took part in them.

“The past year 2020 has been unprecedented, due to the COVID-19 pandemic, which has hit economies and societies in every corner of the world. Unfortunately, this was also the year in which our Group, together with its clients — independent entrepreneurs — was supposed to celebrate the 25th anniversary of its activity in Poland. However, instead, we were forced to adapt quickly to a dynamically changing new reality. The epidemic has made us aware of the enormous responsibility our business has and the vital social role it plays. On the one hand, we focused on maintaining the continuity of the food supply chain to Polish homes, on the other — on the constant support of our customers in these difficult circumstances. We also had to ensure the safety of both entrepreneurs, customers of their stores, as well as more than 20 thousand employees of the Group itself. I think I can say today that we have overcome these challenges. Although, of course, due to the current epidemiological situation, we are still working on a double turnover — says Luis Amaral, Chairman of the Management Board of the Eurocash Group.

Social responsibility of the Group in 2020

The Eurocash Group has been reporting its non-financial activities since 2012. The “Eurocash Group Social Responsibility Report 2020” is the second report prepared in accordance with the global standard Global Reporting Initiative (GRAY).

The report presents the Group's activities in relation to the 4 pillars of corporate social responsibility, defined in the “Eurocash Group Sustainability Strategy 2020+”, adopted in 2019. These are:

• Entrepreneurial development: this section describes distribution formats, retail concepts and tools supporting entrepreneurship (eurocash.pl, eurocash.pl Market, IPH, Fresh project) and summarizes, among others, activities within the “Equal in Business” ranking, programs: Heroes at the Start and Heroes of Everyday, as well as educational and training activities of the Eurocash Academy of Skills;
• Quality without compromise for everyone: the section describes quality certification and food safety assurance programmes;
• We consume less, we do not waste! : in this section, the Group presented its commitment to reducing the negative impact on the environment, investments in “green infrastructure” and a low-carbon green fleet, and cooperation with NGOs for a non-food program;
• Safety and Employee Engagement: the section discusses employee programs to improve occupational safety and health, which contributed to the decrease in the rate of work-related injuries from 24.8 in 2019 to 14.6 in 2020, as well as internal training systems, e-learning platform for Group employees, Management Trainee Program, Ambassador Program, project “I have this Gen!” , as well as projects implemented within the framework of employee volunteering and the program “Shopping for Seniors 60+”.

“In our report, you can see that last year we undertook dozens of different initiatives, supporting all our stakeholder groups — tells Luis Amaral. — We always wanted our clients — independent entrepreneurs — to be able to count on our comprehensive support. We have set up a crisis staff composed of experts in various fields and launched a wide information and educational campaign. We provided our clients with all sanitary recommendations, information on legal changes or assistance programs, and we also provided financial support. We also organized the social campaign Heroes of Everyday, which was to show the role of trade workers in the ongoing crisis, and we also educated them via the Internet on a large scale as part of the Eurocash Skills Academy. Our Clients appreciated this and in one of their satisfaction surveys NPS as many as 81% of them admitted that we conduct our business in a responsible manner — adds Amaral.

The full content of the “Eurocash Group Social Responsibility Report for 2020" can be found on the page below links.

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The Eurocash Group has been reporting its non-financial activities since 2012. The “Eurocash Group Social Responsibility Report 2020” is the second report prepared in accordance with the Global Reporting Initiative (GRI) global standard. The report presents the Group's activities in relation to the 4 pillars of corporate social responsibility, defined in the “Sustainable Development Strategy of the Eurocash Group 2020+”, adopted in 2019. The report is based on the cooperation and engagement of the Group's employees and the dialogue with its stakeholders.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

‍The Eurocash Group and the Polish Chamber of Commerce summarized the approach of the largest suppliers of food products and cleaning and hygiene products to local stores in 2020. Who has best adapted to the increased consumer interest in shopping near home during the epidemic? The answers can be found in the latest edition of the “Equal in Business” ranking.

The producers of pasta and rice have made their offer in neighborhood stores more attractive. It has also improved in terms of price attractiveness and the size of the range, offering toilet paper, sweet and homogenized cheeses, milk, canned meat and toothpastes. In general, in 2020, the average offer in 15 of the 35 analyzed product categories looked better than in 2019. In 5 it remained unchanged.

Consumer sacrifices related to the epidemic have poorly sweetened the manufacturers of cookies, pralines and chocolate with their products, although there have been positive exceptions such as Lindt when it comes to chocolates and Dr. Gerard - cookies. Disgust in the mouth may have remained after contact with the offer of the largest suppliers of mustard, jams and juices and non-carbonated drinks. Their average price and assortment offer, unfortunately, looked worse than before the epidemic.

— The majority of Polish consumers go shopping in various chains and sales channels. Therefore, it is important that the offer of independent stores is comparable to discount and centrally managed supermarkets — says Dominik Kasperek, Head of the Central Purchasing Department of the Eurocash Group.

The analyses were based on Nielsen data for the period January-December 2020, showing that many manufacturers increased their sales through independent stores during the period considered. For example, in the canned fish market, this applies to the company Łosoś, cream — Łódź Dairy Cooperative “Jogo” and butter — Mlekpol. Neighborhood stores had a significant share in the distribution and growth of sales of Pepsico carbonated drinks (7 Up, Mirinda, Mountain Dew, Pepsi, Slice, Schweppes). It was the same with the pralines from Lotte Wedel and with the canned vegetables Rolnik, Dawton and Urbanek. Procter & Gamble feminine hygiene products, detergents and toothpastes were also selling very well in local stores.

It happens that independent trade favors even those producers whose offer, as the analysis shows, is not at all the most attractive in terms of price or assortment. This was the case, for example, of the Danone concern, which realized a significant part of the sales growth of its yogurts and homogenized cheeses in local stores. It was the same with Nestlé breakfast cereals, Winiary sauces and mayonnaises, Upfield margarines (Delma, Flora, Kasia, Rama) and Jacobs Douwe Egberts coffees.

For some manufacturers, local stores were such an important sales channel in 2020 that their price offer was better there than in discount stores or supermarkets. An example is Angel Camacho jam producer (Fragata, La Vieja, Mirella, Ovation, Stovit), Lumiko — margarine producer, Gostyń Dairy Cooperative — butter supplier and Melvit and Kros — rice producers. Equally attractive was the offer of homogenized cheeses Lactalis and Średzka Dairy Cooperative “Jana”, cream from the Gostyń Dairy Cooperative and Łódź Dairy Cooperative “Jogo”, canned vegetables from Charsznické Poles Natury and canned meat from Stek-Rol (Evrameat).

— The analyses of KPMG “New reality: the consumer in the age of COVID-19” and the GfK study “Corona Mood” show that the purchasing habits of Poles have changed under the influence of the epidemic. We buy more in local stores, because we find in them the products we need, convenience and safety. Thanks to them, we shop faster and reduce the time spent in the store. More often we also pay attention to the adequate value for money. Therefore, manufacturers even more carefully than before the epidemic should look at their market strategies and assess whether they treat all types of stores and their customers the same — summarizes Dominik Kasperek.

The “Equal in Business” ranking has been developed since 2017. Its aim is to level the playing field of independent stores in competition with centrally managed chains. Quarterly analyses are designed to help the largest producers of fast-moving goods in Poland understand how important independent trade plays in Poland and what the expectations of its customers are. Full data on all 35 product categories and detailed calculation methodology are available on the website Eurocash Groups.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

• Eurocash Group revenues in 2020 exceeded PLN 25.4 billion and were 2.2% higher than a year earlier. The Group recorded an increase in sales in all business segments.
• Consolidated EBITDA (i.e. operating profit plus depreciation) last year reached PLN 804 million, which represents an increase of 1.2% compared to 2019. The Group estimates that the costs incurred related to the COVID-19 epidemic (after taking into account the co-financing under the so-called anti-crisis shields) charged the result in 2020 with the amount of approximately PLN 15 million.
• The net profit of the Eurocash Group in 2020 exceeded PLN 68 million compared to PLN 79 million in 2019.

“The year 2020, in which we planned to celebrate the 25th anniversary of the Eurocash Group, showed more than ever how important our mission to support Polish independent retailers is. Our overarching goal was to ensure the continuity of the food supply chain to millions of consumers in every corner of Poland. The proximity of small and medium-sized grocery stores, their locality, experienced and consumer-aware service, have gained even more importance. Despite many challenges, we have fulfilled our mission. We also achieved solid financial results despite the fact that the sales of several of our businesses, such as Eurocash Gastronomy and Inmedio, decreased significantly due to COVID-19 restrictions — told Jacek Owczarek, Member of the Management Board and Chief Financial Officer of the Eurocash Group.

Wholesale: online orders becoming more and more popular

Sales of the wholesale segment in 2020 reached PLN 18.9 billion (+1.0% y/y) and accounted for more than 74% of the Eurocash Group's total revenues. EBITDA of this segment amounted to PLN 629 million (+1.4% y/y).

— Last year, we recorded a further increase in sales in Cash & Carry wholesalers. Eurocash Service sales were also significantly higher than a year earlier. These increases were offset by lower sales in the Eurocash Gastronomy format, which supplies restaurants and hotels, strongly affected by the epidemic, as well as a decrease resulting from the contract with Orlen, which ended in 2019 — told Jack the Shepherd.

— The year 2020 in the wholesale segment is also a period of dynamic growth in sales through the eurocash.pl platform. Online orders already accounted for nearly 80% of sales in the Eurocash Dystrybucja format, supplying, among others, franchise stores Euro Sklep, Groszek, Lewiatan and Gama — indicated Member of the Management Board of the Eurocash Group.

At the end of 2020, the Eurocash Group's wholesale network included 180 Cash&Carry wholesalers, which includes a network of abc partner stores with 9,317 local grocery stores (an increase of 332 outlets compared to the end of 2019). In the franchise and partner networks cooperating with Eurocash Dystrybucja, there were 5,251 stores associated (an increase of 118 y/y).

Detail: integration completed, time for further digitization and expansion

External sales realized by the Eurocash Group in the retail segment in 2020 amounted to PLN 6.1 billion (+3.2% y/y), and EBITDA of this segment amounted to more than PLN 315 million (+1.4%).

“Last year, we finalized the integration of supermarket chains acquired in previous years with Delicatesami Centrum. Today it is a single organizational structure, functioning under a common brand, so we can now focus on the development of the offer for consumers, digital transformation, as well as further expansion, together with our customers — owners of independent retail stores — announced Member of the Management Board of the Eurocash Group.

At the end of 2020, the Eurocash Group's retail network included 1,573 small supermarkets (967 franchised and 606 own), including 1,545 operating under the Delikatesy Centrum brand, and 432 Inmedio newsrooms.

Projects: expansion in any format

Sales of the Projects segment in 2020 exceeded PLN 300 million and were 187% higher than in 2019. This increase was mainly due to the acquisition by Eurocash of a majority stake in Frisco in June last year, and therefore in the second half of 2020 the Group consolidated 100% of the results of the e-supermarket. The consolidation of Frisco, which has already reached break-even, also had a positive impact on the EBITDA result of the Projects segment. The negative EBITDA value (PLN -33 million in 2020 versus PLN -40 million in 2019) is related to the costs of further expansion of innovative retail formats developed by the Eurocash Group. At the end of 2020, the chain of liquor stores Duży Ben already had 129 outlets (+52 y/y), Kontigo cosmetic stores were present in 36 locations (+6 y/y), and the abc network on wheels had 115 mobile stores (+29 y/y).

“In 2021, we plan to continue the expansion of each of these projects. As for Frisco.pl, whose sales last year increased by about 60% y/y, we plan to gradually enable residents of other large cities to shop in our e-supermarket. According to the announcements, after Warsaw, since November last year, convenient shopping on Frisco.pl is already available to residents of Wrocław — recalled Jacek Ovczarek.

Eurocash Group is the largest Polish company engaged in wholesale distribution of quickly marketable food products, household chemicals, alcohol and tobacco products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together about 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep, Gama, Duży Ben and Kontigo. In order to achieve a scale appropriate to ensure the competitiveness of its customers, the Eurocash Group is also developing a network of its own retail stores.

‍Eurocash has entered into an investment agreement under which it will acquire 49% (and ultimately 50%) of shares in Arhelan, which operates more than 100 retail stores in northeastern Poland.

The investment in Arhelan is part of the Eurocash Group's development strategy in the retail segment, which involves the creation of the largest supermarket chain in Poland based on its own and franchise stores. Thanks to this transaction, Eurocash acquires a partner for the joint development of the retail network in northeastern Poland, ultimately within the Delikatesy Centrum franchise structures under the logo Polskie Sklepy Arhelan and Delikatesy Centrum. Capital support from the largest wholesale food distributor in Poland, as well as its experience and know-how, will enable faster development of the Arhelan chain of stores.

— Arhelan is our important business partner in this region of Poland. Thanks to many years of cooperation in the field of wholesale supply, we had the opportunity to learn about the working philosophy of this network. We have great respect for the people who built this organization from the ground up and are successfully managing it in a very competitive market. Appreciating many years of experience and knowledge of local specificities, we decided to engage in its further development — comments Jacek Owczarek, Member of the Management Board of the Eurocash Group.

Arhelan is one of the largest regional supermarket chains in Poland, operating in the Podlaskie, Mazovia, Lublin and Warmian-Masurian voivodships. Arhelan has been operating on the market since 1991 and employs almost 2,000 employees. Its sales revenue in 2020 exceeded PLN 500 million. The hallmarks of the brand are fresh products of the highest quality, sourced from proven suppliers, and Arhelan's expansion model is part of a socially responsible presence in local markets.

— In the face of changing market conditions, the expansion of large chains, as well as challenges related to new legal regulations and increasing digitalization, we want to provide customers with access to an attractive assortment and price offer, taking into account the specifics of the local markets in which our stores operate. At the same time, we understand that we need to invest not only in the development of the network, but also in modern marketing and IT tools that make it easier for our customers to make everyday purchases. Therefore, we join forces with a partner with whom we will be able to better exploit the development potential of our company — says Helena Burzyńska, member of the board and founder of the Arhelan network.

— Our ambition is to ensure the competitiveness of independent Polish traders by providing them with access to efficient logistics and modern marketing and digital tools. In the Eurocash Group we believe in business partnership and highly value the competence of the owners of Arhelan, therefore we want to maintain the current character of the company, as our partner in this venture — highlights Jacek Ovczarek.

— Maintaining competitiveness in the retail market requires significant investment. The growing demands of consumers make it a direction from which there is no turning back. I am convinced that the capital commitment of Eurocash as a new partner in our company will help us to continue the expansion and development of the network in response to the changing needs of customers. We have ideas for investments that — thanks to the commitment and support of Eurocash — have a much better chance of being realized — adds Helena Burzynska.

The investment agreement concluded by the parties provides that at a later date Eurocash will acquire an additional 1% stake in Arhelan, thus increasing its commitment to 50%. The agreement also defines the principles of Arhelan's cooperation with the Eurocash Group, including the targeted functioning of Arhelan within the franchise structures of Delikatesy Centrum chains under the logo Polskie Sklepy Arhelan and Delikatesy Centrum.

The transaction is subject to the fulfilment of a number of conditions, in particular Eurocash obtaining the consent of the President of the Office for Competition and Consumer Protection to take control of Arhelan.

Eurocash Group is the largest Polish company engaged in wholesale distribution of quickly marketable food products, household chemicals, alcohol and tobacco products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together about 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep, Gama, Duży Ben and Kontigo. In order to achieve a scale appropriate to ensure the competitiveness of its customers, the Eurocash Group is also developing a network of its own retail stores.

125 webinars attended by more than 23,000 participants. Almost 12,500 newly hired trade workers of various levels trained online, more than 1,600 participants in in-person workshops (even before the pandemic) and more than 21,000 regular users of the e-learning platform and more than 130,000 completed e-learning courses. Eurocash Skills Academy, which celebrates its 10th birthday this year, sums up the past year with big numbers.

— We started the first quarter of this year traditionally — with stationary workshops, but immediately after the introduction of the first restrictions related to the epidemic, we transferred all our activities to the network — tells Agata Wrzecionowska-Dzierba, manager of the Eurocash Academy of Skills. “We had to act quickly, to adapt both the tools and the Academy's program to the new realities. The first webinar on the issues related to the epidemic was already held on March 18. In this form, we conducted 124 webinars even later. The last one, which gathered the largest audience, was led in December by Luis Amaral, President of the Eurocash Group. In May, in response to the needs of our customers, we introduced an accelerated deployment path for newly hired store employees. In this way, we wanted to support entrepreneurs in recruiting under the current conditions. In 2021, we plan to return to in-person training, in the store it is the most favorite form of training of our customers, but we will also continue online training. We will start 2021 with a series of webinars dedicated to technological innovations used in retail such as photovoltaics or energy-efficient refrigeration devices in the grocery store — adds Wrzecionowska-Dzierba.

The Academy's webinars conducted in 2020 covered both business management in crisis, new consumer trends, leadership and motivation to work in difficult times, but also introduced regulations and restrictions. They were led by experts and motivational speakers such as: Prof. Rafał Ohme, Wojciech Eichelbeger, Marek Zuber, Natalia Hatalska, Paweł Tkaczyk, Jacek Santorski, Szymon Kudła, Jakub B. Bączek, market experts (e.g. from Deloitte, Nielsen, Kantar), lawyers from SKS Law Firm (partner of the Academy), as well as trainers of the Academy and employees of the Eurocash Group.

AUE experts and trainers also developed an express educational program that helped entrepreneurs to efficiently and safely train newly hired store employees, more than 12 thousand people took advantage of it.

The epidemic also did not prevent the dissemination of knowledge also among the younger generation. Eurocash Skills Academy, as a partner of the European Vocational Skills Week, during its webinars showed almost 700 students from trade schools and technicians what it means to work in the profession of a salesperson, logistician, warehouseman and a person running their own business within one of the franchise networks organized by the Eurocash Group.

In the past year, the educational platform of the Eurocash Academy of Skills has also gained popularity. Currently, more than 21,000 people use it, which is almost 22% more than last year.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

The Eurocash Group recently launched the next installment of the social campaign “Heroes of Everyday”. The action aims to show the role and importance of local shops “just around the corner” and encourage Poles to make everyday purchases in them. The campaign is promoted, among others, on social media by well-known influencers. Eurocash also made a short video showing the advantages of independent stores run by entrepreneurs over centrally managed stores. To date, it has already had more than 670,000 views.

“Although millions of Poles have access to the products they need every day thanks to local shops, we rarely think of them as pillars of the Polish economy and how important their role is socially. That is why we have prepared our social campaign — tells Pedro Martinho, Member of the Management Board of the Eurocash Group. “It publicizes what everyone knows perfectly well from their everyday purchases, and what has become obvious this year due to the coronavirus epidemic. Shops “just around the corner” are safe shopping, close customer relationships with employees and store owners, convenience and a sense of consumer subjectivity. Our campaign also has a much broader dimension. We did not include our logo on our video and materials, because we want to draw attention to the social importance of the work and dedication of the owners and employees of all independent stores, both those associated in franchise chains, operating independently under their own banner or even sourcing from other than our wholesalers. We want to show that they are all Heroes of Everyday Life. Therefore, I hope that everyone who cares about the good of independent trade and supporting local entrepreneurs will be involved in sharing our video. We are counting on you! — adds Martinho.

The “Heroes of Everyday” campaign had its first installment in March this year, during the first wave of the coronavirus epidemic. As part of the second, current edition of the campaign, the Eurocash Group created, among others, a video presenting the uniqueness of the relationship that forms between consumers and people working in stores “just around the corner”. The video can be seen HERE. To date, it has already had more than 670,000 views (via social media and YouTube).

The campaign is also supported by well-known influencers and media stars who show on their social media what they value local stores and shop in them for.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

According to entrepreneurs who run independent retail stores, the purchasing habits of consumers have changed under the influence of the epidemic. Increasingly, they choose local stores, indicating safety and proximity. What consumer trends and changes in the trading market will stay with us for longer? Eurocash Group publishes the report “COVID-19 through the eyes of Entrepreneurs”.

“As Eurocash Group, we have set ourselves the goal of consistently fulfilling our mission, which is to ensure continuity of supplies, so that every Pole has constant access to food. As much as 40% of the population in Poland lives in towns with less than 10,000 inhabitants, and many of them do not have access to large retail chains. That's us and our customers' stores. Entrepreneurs cooperating with the Eurocash Group provide access to food for millions of Poles. The results of this study are extremely valuable to us because we know how to better respond to the needs of the entrepreneurs we work with on a daily basis and how to grow our business — now and in the future. We also know how consumers' shopping habits changed and what products they reached for in a given wave of the epidemic. Thanks to this, we can constantly work on our offer and provide new and better solutions to our customers — tells Pedro Martinho, Member of the Management Board of the Eurocash Group.

As many as 70% of the surveyed entrepreneurs noticed an increase in turnover in their stores after the first 6 months of the epidemic. Declines were recorded by 17%, and no change - 13% of local store owners. According to the respondents, the increase in turnover was influenced by several factors, among which are mentioned: the increase in the number of cashless payments, the involvement of store owners in prosocial activities and the acquisition of new customers who buy so far in hypermarkets and discount stores.

Under the influence of the epidemic, more than 58% of the surveyed entrepreneurs introduced new solutions in their stores, such as shopping on the phone or via instant messenger, picking up ready-made purchases in the store or delivering them to their home.

The epidemic situation and consumer sentiment had an impact on shopping lists. When isolated cases of coronavirus were diagnosed in Poland, the interest in products to protect against viruses and support health quickly grew in stores. The increase in the number of COVID-19 patients has influenced the increase in the value of shopping baskets, mainly by buying dry products in stock. Restrictions on movement have increased interest in online shopping, but there have been concerns about restrictions in the availability of certain goods and price increases. Returning to work and school restored normalcy, but most customers maintained hygienic caution in stores. Consumers were less likely to shop, but when they did, they chose local shops. Safety and proximity to the store became a priority.

Entrepreneurs noted that before the epidemic, buyers came to neighborhood stores almost every day. The coronavirus epidemic caused the value of the shopping cart to increase, but consumers visited stores less often - 2-3 times a week.

When asked about what changes entrepreneurs would make in stores if they had the opportunity, having current knowledge after several months of the coronavirus epidemic, as many as 90% of them would give up hours for seniors. Other proposed changes are regulations that will make it easier to enforce the in-store mouth and nose covering order and for the government to regulate prices at a time of increased demand for protective measures against the virus.

According to the owners of independent stores, consumers returning to local stores will stay longer - they have concerns about being in large retail outlets. Entrepreneurs believe that after the epidemic, independent trade should fight for buyers in discount stores and other large-scale outlets with the help of promotions and prices. They assume that the high number of non-cash transactions will continue (in some stores it has increased by up to 50% compared to the period before the epidemic). For the sake of the safety of themselves, employees and customers, entrepreneurs do not want to give up protective equipment (gloves, masks, lotions), even after the epidemic has expired.

“We are richer in knowledge about what retail will look like in the coming months, and perhaps even years. The independent market can benefit from this. Consumers, taking care of themselves and their loved ones, will choose to shop close to home, in places they consider safe, perhaps means of protection will remain in stores for a long time, and cashless payments will become even more common — says Pedro Martinho, Member of the Management Board of the Eurocash Group.

The report “COVID-19 through the eyes of entrepreneurs” was prepared based on the results of in-depth telephone surveys conducted from April to July this year on a representative group of 346 retail store owners. The report also used data from available market research by research agencies.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

• Eurocash Group's revenues in the third quarter of 2020 exceeded PLN 7 billion and were 5% higher than in the same period last year. Sales in the wholesale segment increased by more than 3% y/y, and in the retail segment — by nearly 4% y/y. By leaps and bounds, as revenues of the Projects segment increased by as much as 268%, which is due to the consolidation of 100% of Frisco's results from July this year and the expansion of innovative retail concepts developed by the Group.

• Consolidated EBITDA (i.e. operating profit plus depreciation) in the third quarter of this year amounted to PLN 225 million, which means an increase of almost 3% compared to the same period in 2019. The Eurocash Group estimates that the additional costs related to the COVID-19 epidemic were lower than in the previous quarters and charged the EBITDA result in the period under consideration by the amount of approximately PLN 2 million.

• The net profit of the Eurocash Group in the period July-September this year amounted to almost PLN 37 million and was more than 34% higher than in the third quarter of 2019.

Wholesale: more than 30% of sales made through eurocash.pl

Sales of the wholesale segment of the Eurocash Group in the third quarter of 2020 reached PLN 5.26 billion (+3.4% y/y), and EBITDA of this segment amounted to PLN 185 million (+7.4% y/y).

— Wholesale revenues were strongly supported by sales to independent stores and franchisees, as well as a dynamic increase in sales of cigarettes and impulse products. These increases were more than offset by lower sales in the Eurocash Gastronomy format, which supplies restaurants and hotels, which are heavily affected by the epidemic, as well as the decrease resulting from the contract with Orlen, which ended the previous year — indicated Jacek Owczarek, Member of the Management Board and Chief Financial Officer of the Eurocash Group.

“The third quarter was also another in a row in which we recorded record sales through the eurocash.pl platform. Online orders already accounted for 31% of total sales in the wholesale segment (excluding Cash & Carry format). This shows that our e-commerce solution for retail entrepreneurs has great potential not only during the economic shutdown, but also during the period when most of the restrictions related to the epidemic have been lifted. Customers appreciate eurocash.pl, among other things, for the convenience and speed of orders — emphasized Jacek Ovczarek.

Detail: Delicatessen Centrum increases sales and launches service click & collect

External sales realized by the Eurocash Group in the retail segment in the third quarter of this year amounted to PLN 1.58 billion (+3.5% y/y), and EBITDA of this segment amounted to more than PLN 76 million (compared to PLN 79 million a year ago).

— The engine of retail revenue growth was mainly sales made by Delikatesy Centrum franchise stores. Inmedio newsrooms also recorded significant growth, which recovered sales in the third quarter after a period of restrictions in the operation of shopping malls, in force from March to May — indicated Jacek Ovczarek.

“The current year is the period of further integration of the supermarket chains acquired in previous years with Delicatesami Centrum. Its final stage, scheduled for the fourth quarter of this year, is the unification of the assortment and rebranding of Mila stores. An important event of the past quarter was the preparation for the launch of the “click & collect” service in Delikatesach Centrum, thanks to which consumers can order purchases online and then pick them up at the selected establishment. This service is already available in more than 1.2 thousand supermarkets throughout Poland, and in the Delicatesów Centrum online offer you can find about 6.7 thousand products — informed Member of the Management Board of the Eurocash Group.

Projects: growth in every format, Frisco on the brink of operating profitability

Sales of the Projects segment in the third quarter of 2020 exceeded PLN 100 million and were 268% higher than in the same period of 2019. This surge is mainly due to the purchase by Eurocash in June of this year of the majority stake in Frisco, and as a result, starting from the third quarter of this year, the Group consolidates 100% of the results of the leading Polish e-supermarket.

— Frisco's revenues in the period under review amounted to more than PLN 50 million and were more than twice as high as in the third quarter of 2019. Such a level of sales means that Frisco reached the break-even threshold at the level of operating result (EBIT) — indicated Jacek Ovczarek.

In the third quarter of this year, sales growth was also recorded by all innovative retail concepts developed by the Eurocash Group: Big Ben (+111% y/y), abc on wheels (+108% y/y) and Kontigo (+46% y/y), which is related to the expansion of these networks. In the case of liquor stores Duży Ben and mobile abc stores on wheels, significant sales growth was also achieved in terms of LFL — +16% and +32% y/y, respectively.

Eurocash Group is the largest Polish company engaged in wholesale distribution of quickly marketable food products, household chemicals, alcohol and tobacco products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together about 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep, Gama, Duży Ben and Kontigo. In order to achieve a scale appropriate to ensure the competitiveness of its customers, the Eurocash Group is also developing a network of its own retail stores.

‍The Delikatesy Centrum supermarket chain, organized by the Eurocash Group, has launched the “click&collect” service. Thanks to it, customers will be able to order their purchases online and then pick them up at the selected branch of the network. The service is already available in more than 1,200 supermarkets across Poland. In the Delikatesów Centrum online offer you can find about 6,700 products.

Using the service is simple - just go to the website of the network (sklep.esy.pl), from the available list of outlets choose the nearest store and complete your shopping list. After completing the order, the selected establishment will contact the customer by phone to confirm the availability of the products or, if they are not available, to propose replacements. After completing the purchases by the store employees, the customer receives an e-mail and sms notification about the possibility of collection. Payment is made on the spot in the store. The total value of one-time purchases made in the click&collect system can range from 50 to 300 PLN, purchases are completed in a maximum of 5 hours, and the customer has 24 hours to collect them. When receiving an order, the customer can supplement purchases, for example, with products from local suppliers that are not currently available as part of the service.

— The introduction of the click&collect service is our response to the needs of consumers in connection with the coronavirus epidemic, but also our customers — franchisees running establishments under the brand Delikatesy Centrum — tells Noel Collett, CEO of Delicatessów Centrum at Eurocash Group. — This solution allows for fast and safe purchases, it also reduces the time spent in the store, and provides our customers with another solution that can increase their competitiveness in the market. We are currently at the stage of intensive work related to the implementation of further functionalities and improvement of the system. We plan to implement the service in all network locations and expand our online offer to 7 thousand products by the end of this year. However, we are already the largest chain in the grocery store with a click&collect option. Thanks to this, residents of villages and small towns throughout Poland can take advantage of the service available so far mainly for residents of large cities — adds Noel Collett.

As part of the Delikatesy Centrum network, there are currently 1,565 establishments.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

‍Groszek — one of the largest franchise store chains in Poland, organized by the Eurocash Group — is celebrating its 20th anniversary. On this occasion, its stores will gain a new logo, a visual identity and a new interior design. The network, which already has more than 1920 outlets, has also launched a new application for consumers and the “Peas POS” system for its franchisees, which allows, among other things, to create personalized promotions.

“This is another of the chains organized by our Group, which has recently changed the logo and introduced a number of new solutions to stores, which are intended to increase their competitiveness in the dynamically changing retail market. Constant support in building the advantages of small and medium-sized stores is invariably the mission of our entire Group — says Jacek Owczarek, Member of the Management Board of the Eurocash Group. — As for the very process of implementing the new visualization, we will gradually introduce it to all Groszków in Poland. However, new stores will immediately receive it, just joining the network. Currently, the new visualization can be seen in two Groszek stores — in Polichno and Józefów on the Vistula, but more establishments will join them in the near future — adds Jack the Shepherd.

New logo and new visualization

The new logo of the network in some way refers to its original version. The distinctive red dot, which was previously part of the network name in the logo — is now in front of it.

Although the stores of Peas will continue to be green-yellow-red, this will change the decoration of the storefronts and the boxes. The layout inside the stores will also change. They will feature new beech wood racks, shelving markings and promotion zones, which will make it easy for customers to find the product they are looking for. There will also be a new arrangement and additional lighting of specialized meat, vegetable and bakery stands.

Changes are also visible in the communication of the Groszek brand itself. The network has acquired a new slogan: “Peas. Full of shopping. Full of joy.”

New technologies for franchisees and consumers

Another surprise on the occasion of the 20th anniversary of the network is the introduction of a new mobile application for consumers “Peas”. The application allows you to easily and quickly access the latest offers. It will contain, among other things, information about the new store newsletter, as well as price and multi-price promotions. You can also check the opening hours of the selected store and the available services. It also allows you to send a message directly to the store to share your insights or request an order for a product for a special occasion. In the section “Useful links” you will find information about contests on the Facebook network, or new videos published on the YouTube channel. The app is available for download on Google Play and App Store.

The “Peas POS” system, in turn, is a solution dedicated to franchisees. It's mobile software, who? re means? What improves service? customer? In, reduces queues and gives moz? luxury? c? Remote control? Do you shop with cash? Is there room for s? you know. Penny POS umoz? Livia too? e service? promotional offers, e.g. moz? luxury? c? multi-stage promotions.

As he emphasizes Magdalena Pajor, Director of Franchise Networks: 20 years of presence on the market is proof that our business model is working, and Groszek stores for many Poles are the place of first choice due to their proximity, wide assortment and friendly atmosphere. We have been trusted by thousands of customers and franchisees, and we thank them wholeheartedly for that. The proposed changes will build the competitive advantage of our franchisee stores and make it possible to better match their offer to the needs of local consumers. This possibility of offering products tailored to specific consumers purchasing a given Groszek, is their great advantage over large stores and chains that offer the same products to everyone, throughout Poland — adds Magdalena Pajor.

Eurocash Group is the largest Polish company engaged in wholesale distribution of food products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together more than 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep and Gama.

‍Over the past year, independent stores have improved their price competitiveness with discount stores and supermarkets. However, the restrictions caused by COVID-19 meant that many manufacturers again began to offer worse conditions to independent trade and its customers - according to the analysis of the second quarter of 2020 based on the ranking of the Eurocash Group and the Polish Chamber of Commerce “Equal in Business”.

The analysis of price indices carried out as part of the ranking is not about inflationary price changes, which are monitored, for example, by the Central Statistical Office, but about differences in average prices of the same, most popular assortment, offered by the largest FMCG manufacturers in independent stores compared to supermarkets and discount stores.

“Such a comparison better shows the real differences that consumers face in different stores and points to manufacturers who, in our opinion, are playing not fair. — says Dominik Kasperek, Director of the Central Purchasing Department of the Eurocash Group, which cooperates with more than 80,000 entrepreneurs, owners of local stores throughout the country.

Independents are getting better

A comparison of the price indices of the “Equal in Business” ranking of April and May 2019 with the “covid” second quarter of the current year shows that many manufacturers have convinced themselves to independent stores, improving their offer in them. In relation to discounts, improvement occurred in as many as 16 of the 29 product categories monitored, and the most in terms of prices of rice (decrease in price difference from 35 to 12%), pasta (decrease from 25 to 6%), chips and popcorn (from 25 to 22%), jams (from 24 to 20%), milk (from 20 to 16%), ketchup (from 19 to 16%) and tea (from 11 to 8%). Also in relation to supermarkets, independent trade improved price competitiveness in 17 out of 29 categories, and the most in chocolate (decrease from 16 to 13%), dairy desserts (from 13 to 10%), jams (from 12 to 9%) and pasta (from 5 to 2%).

However, still the price differences of the same range and the same manufacturers between independent stores and discount stores range between 6% (pasta) and 27% (pastries). With regard to supermarkets, they range from 2% (pasta and canned vegetables) to 15% (mustards).

Consumers are willing to pay a few percent more for the convenience of shopping near their home or workplace, but with greater differences, they tend to give up shopping, which does not serve them, nor store owners, nor even manufacturers Dominik Kasperek thinks.

Untapped potential

About 40% of retail sales are realized in small and medium-sized stores, which distinguishes Poland from other European countries. Family and decentralized stores form the largest distribution channel, located closest to consumers and most visited by them. According to the Eurocash Group and the Polish Chamber of Commerce, its potential is not fully exploited by the largest producers, who, by favoring discounts or centrally managed supermarkets, weaken independent trade and negatively affect its customers.

The situation was somewhat aggravated by the epidemic, as its impact on the economy and people's lives was translated into the market strategies of food manufacturers and cleaning and hygiene products. This is shown by a comparison of the price indices of the “Equal in Business” ranking for the first and second quarters of this year. During this time, there was a deterioration in the price relationship between independent stores and discount stores in 15 out of 35 product categories, and in 17 out of 35 categories in relation to supermarkets.

The fight for sustainable strategies

“In the second quarter, the competition of distributors for the most walkable goods and prices began. This included, for example, pasta, rice, laundry detergents and toilet paper. Beer or whiskey producers, on the other hand, decided to compensate for the losses caused by the lockdown with aggressive promotions. It was easiest for them to organize such actions in discount stores and supermarkets, but better prices and promotions in independent stores testify that this market has also become a partner for increasing sales of many manufacturers — concludes Dominik Kasperek.

An example of a supplier that invested heavily in its presence in independent stores in the second “covid” quarter is the chocolate manufacturer Lindt & Sprüngli. Throughout last year and at the beginning of this year, it was ranked at the end of the rate, which means it based its sales on discount stores and supermarkets. Now it is in third place, which is due, among other things, to a better offer and more sales of its chocolates in small and medium-sized stores.

Eurocash Group is the largest Polish company engaged in wholesale distribution of quickly marketable food products, household chemicals, alcohol and tobacco products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together about 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep, Gama, Duży Ben and Kontigo. In order to achieve a scale appropriate to ensure the competitiveness of its customers, the Eurocash Group is also developing a network of its own retail stores.

‍ABC is the largest nationwide chain of stores organized by the Eurocash Group as part of the partner system. Known to all Poles, the orange-green shops will get a new yellow-green robe, the chain will also change its logo. In line with the slogan “With us you are the brand” on the new store signs, in addition to the logo and the name of the chain, a personalized name of the establishment will also appear. Such changes will be gradually introduced in all establishments in Poland. In total, there are already more than 9,000 of them.

“We have been developing ABC partner stores since 1999 as part of our Eurocash Cash&Carry business unit. At that time, ABC became the largest chain of stores in Poland — tells Jacek Owczarek, Member of the Management Board of the Eurocash Group. This concept is very versatile and works well both in large cities and in small towns. Entrepreneurs, deciding to cooperate with us, gain both a sign of a brand recognizable throughout Poland, as well as marketing support and stocking the store with the most popular products at competitive prices. Nevertheless, the final shape and the offer of their store are decided by entrepreneurs. It is they who have been the strength of this network for 20 years and that is exactly what we want to show by introducing our changes. Our goal is to build effective advantages of these stores and constantly increase their competitiveness in the difficult, dynamically changing retail market in Poland — adds Jack the Shepherd.

What's changing?

ABC stores will get both a new color - from now on they will be yellow-green, as well as a new logo and shop signs, which will additionally allow independent entrepreneurs to personalize their establishment. The new visual identification of stores will be introduced gradually from November both in newly opened stores and those already operating. The network emphasizes that the decision to use the introduced solutions will be up to the store owner himself.

- In our case, the change in the visualization of stores is to show the advantage resulting from the special role of the store owner and his establishment for local communities. It is entrepreneurs who guard the local needs of their customers and build their brand, and we, as a network organizer, want to support them in this. I mean both a new logo, changes in the color scheme of the stores, the possibility of giving the establishment its own name, but also the remodeling of the concept, which is intended to increase their functionality and assortment competitiveness. It is up to the store owner to decide which changes we make and to what extent. sign ABC is the guarantor of supporting independence, access to the best commercial solutions and the opportunity to offer price-promotional advantages resulting from the scale of the Group. I am convinced that with the new approach to building the ABC affiliate system, entrepreneurs can plan their further development — explains Małgorzata Obrębska, CEO of Eurocash Cash & Carry.

Remodeling concept

In addition to visual changes, store owners will also be able to make a number of modifications to the interiors of their establishments. The network will provide, among other things, new sales counters, the construction of which allows the display of impulse food and chemical products, as well as new racks for the display of vegetables and fruits. There will also be solutions aimed at improving the visibility of the assortment, supporting seasonal sales or promotions.

The new edition of ABC stores is even more focused around the idea of promoting local suppliers and products.

To date, the ABC network has opened two outlets in a new version.

Eurocash Group is the largest Polish company engaged in wholesale distribution of quickly marketable food products, household chemicals, alcohol and tobacco products and marketing support for independent Polish entrepreneurs conducting retail activities. Franchise and partner networks supported by Eurocash bring together about 16 thousand independent stores operating under brands such as abc, Groszek, Delikatesy Centrum, Lewiatan, Euro Sklep, Gama, Duży Ben and Kontigo. In order to achieve a scale appropriate to ensure the competitiveness of its customers, the Eurocash Group is also developing a network of its own retail stores.